Correlation Between Apple and DELTA AIR
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and DELTA AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and DELTA AIR LINES, you can compare the effects of market volatilities on Apple 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 Apple with a short position of DELTA AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and DELTA AIR.
Diversification Opportunities for Apple and DELTA AIR
Modest diversification
The 3 months correlation between Apple and DELTA is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and DELTA AIR go up and down completely randomly.
Pair Corralation between Apple and DELTA AIR
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the DELTA AIR. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.65 times less risky than DELTA AIR. The stock trades about -0.45 of its potential returns per unit of risk. The DELTA AIR LINES is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 5,850 in DELTA AIR LINES on October 29, 2024 and sell it today you would earn a total of 571.00 from holding DELTA AIR LINES or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. DELTA AIR LINES
Performance |
| Timeline |
| Apple Inc |
| DELTA AIR LINES |
Apple and DELTA AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and DELTA AIR
The main advantage of trading using opposite Apple and DELTA AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. LG Display Co | Apple vs. Mitsubishi Gas Chemical | Apple vs. InPlay Oil Corp | Apple vs. PLAY2CHILL SA ZY |
| DELTA AIR vs. INTERCONT HOTELS | DELTA AIR vs. Endeavour Mining PLC | DELTA AIR vs. MAGNUM MINING EXP | DELTA AIR vs. De Grey Mining |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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