Correlation Between BJs Wholesale and Delta Air
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Delta Air 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 BJs Wholesale and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Wholesale Club and Delta Air Lines, you can compare the effects of market volatilities on BJs Wholesale and Delta Air 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 BJs Wholesale with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Delta Air.
Diversification Opportunities for BJs Wholesale and Delta Air
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BJs and Delta is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines and BJs Wholesale 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 BJs Wholesale Club are associated (or correlated) with Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Delta Air go up and down completely randomly.
Pair Corralation between BJs Wholesale and Delta Air
Assuming the 90 days horizon BJs Wholesale is expected to generate 1.18 times less return on investment than Delta Air. But when comparing it to its historical volatility, BJs Wholesale Club is 1.6 times less risky than Delta Air. It trades about 0.32 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 5,739 in Delta Air Lines on November 3, 2024 and sell it today you would earn a total of 815.00 from holding Delta Air Lines or generate 14.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BJs Wholesale Club vs. Delta Air Lines
Performance |
| Timeline |
| BJs Wholesale Club |
| Delta Air Lines |
BJs Wholesale and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Delta Air
The main advantage of trading using opposite BJs Wholesale and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air's long position.| BJs Wholesale vs. Walmart | BJs Wholesale vs. Walmart | BJs Wholesale vs. Costco Wholesale | BJs Wholesale vs. Target |
| Delta Air vs. AIR CHINA LTD | Delta Air vs. RYANAIR HLDGS ADR | Delta Air vs. Southwest Airlines Co | Delta Air vs. Ryanair Holdings plc |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |