Correlation Between Delta Air and Danaher
Can any of the company-specific risk be diversified away by investing in both Delta Air and Danaher 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 Danaher 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 Danaher, you can compare the effects of market volatilities on Delta Air and Danaher 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 Danaher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Danaher.
Diversification Opportunities for Delta Air and Danaher
Excellent diversification
The 3 months correlation between Delta and Danaher is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Danaher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaher 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 Danaher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaher has no effect on the direction of Delta Air i.e., Delta Air and Danaher go up and down completely randomly.
Pair Corralation between Delta Air and Danaher
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 0.99 times more return on investment than Danaher. However, Delta Air Lines is 1.01 times less risky than Danaher. It trades about 0.15 of its potential returns per unit of risk. Danaher is currently generating about 0.02 per unit of risk. If you would invest 88,347 in Delta Air Lines on September 3, 2024 and sell it today you would earn a total of 42,153 from holding Delta Air Lines or generate 47.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. Danaher
Performance |
| Timeline |
| Delta Air Lines |
| Danaher |
Delta Air and Danaher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Danaher
The main advantage of trading using opposite Delta Air and Danaher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Danaher 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 Danaher will offset losses from the drop in Danaher's long position.| Delta Air vs. FIBRA Storage | Delta Air vs. DXC Technology | Delta Air vs. Deutsche Bank Aktiengesellschaft | Delta Air vs. Southern Copper |
| Danaher vs. Southern Copper | Danaher vs. Ross Stores | Danaher vs. McEwen Mining | Danaher vs. Delta Air Lines |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |