Correlation Between Arrow Financial and Delta Air
Can any of the company-specific risk be diversified away by investing in both Arrow Financial 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 Arrow Financial and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Financial and Delta Air Lines, you can compare the effects of market volatilities on Arrow Financial 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 Arrow Financial with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Financial and Delta Air.
Diversification Opportunities for Arrow Financial and Delta Air
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arrow and Delta is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Financial 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 Arrow Financial 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 Arrow Financial 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 Arrow Financial i.e., Arrow Financial and Delta Air go up and down completely randomly.
Pair Corralation between Arrow Financial and Delta Air
Given the investment horizon of 90 days Arrow Financial is expected to generate 1.54 times more return on investment than Delta Air. However, Arrow Financial is 1.54 times more volatile than Delta Air Lines. It trades about 0.2 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.2 per unit of risk. If you would invest 2,882 in Arrow Financial on September 2, 2024 and sell it today you would earn a total of 416.00 from holding Arrow Financial or generate 14.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Financial vs. Delta Air Lines
Performance |
| Timeline |
| Arrow Financial |
| Delta Air Lines |
Arrow Financial and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Financial and Delta Air
The main advantage of trading using opposite Arrow Financial and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Financial 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.| Arrow Financial vs. Affinity Bancshares | Arrow Financial vs. Auburn National Bancorporation | Arrow Financial vs. BayCom Corp | Arrow Financial vs. First Community |
| Delta Air vs. American Airlines Group | Delta Air vs. Southwest Airlines | Delta Air vs. JetBlue Airways Corp | Delta Air vs. United Airlines Holdings |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |