Correlation Between Delta Air and NB Private
Can any of the company-specific risk be diversified away by investing in both Delta Air and NB Private at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Delta Air and NB Private into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Air Lines and NB Private Equity, you can compare the effects of market volatilities on Delta Air and NB Private and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Delta Air with a short position of NB Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and NB Private.
Diversification Opportunities for Delta Air and NB Private
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Delta and NBPE is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and NB Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NB Private Equity and Delta Air is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Delta Air Lines are associated (or correlated) with NB Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NB Private Equity has no effect on the direction of Delta Air i.e., Delta Air and NB Private go up and down completely randomly.
Pair Corralation between Delta Air and NB Private
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 1.9 times more return on investment than NB Private. However, Delta Air is 1.9 times more volatile than NB Private Equity. It trades about 0.19 of its potential returns per unit of risk. NB Private Equity is currently generating about -0.04 per unit of risk. If you would invest 5,860 in Delta Air Lines on September 2, 2024 and sell it today you would earn a total of 515.00 from holding Delta Air Lines or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. NB Private Equity
Performance |
| Timeline |
| Delta Air Lines |
| NB Private Equity |
Delta Air and NB Private Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and NB Private
The main advantage of trading using opposite Delta Air and NB Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, NB Private can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in NB Private will offset losses from the drop in NB Private's long position.| Delta Air vs. Fidelity National Information | Delta Air vs. L3Harris Technologies | Delta Air vs. Raytheon Technologies Corp | Delta Air vs. International Consolidated Airlines |
| NB Private vs. Microchip Technology | NB Private vs. Albion Technology General | NB Private vs. Sunny Optical Technology | NB Private vs. Spotify Technology SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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