Correlation Between Delta Air and First Majestic
Can any of the company-specific risk be diversified away by investing in both Delta Air and First Majestic 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 First Majestic 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 First Majestic Silver, you can compare the effects of market volatilities on Delta Air and First Majestic 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 First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and First Majestic.
Diversification Opportunities for Delta Air and First Majestic
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Delta and First is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver 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 First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of Delta Air i.e., Delta Air and First Majestic go up and down completely randomly.
Pair Corralation between Delta Air and First Majestic
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 2.28 times more return on investment than First Majestic. However, Delta Air is 2.28 times more volatile than First Majestic Silver. It trades about 0.29 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.15 per unit of risk. If you would invest 121,500 in Delta Air Lines on November 3, 2024 and sell it today you would earn a total of 19,900 from holding Delta Air Lines or generate 16.38% 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. First Majestic Silver
Performance |
| Timeline |
| Delta Air Lines |
| First Majestic Silver |
Delta Air and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and First Majestic
The main advantage of trading using opposite Delta Air and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.| Delta Air vs. Ameriprise Financial | Delta Air vs. First Majestic Silver | Delta Air vs. McEwen Mining | Delta Air vs. Micron Technology |
| First Majestic vs. FibraHotel | First Majestic vs. UnitedHealth Group Incorporated | First Majestic vs. Grupo Carso SAB | First Majestic vs. Taiwan Semiconductor Manufacturing |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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