Correlation Between Delta Air and Grupo Sports
Can any of the company-specific risk be diversified away by investing in both Delta Air and Grupo Sports 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 Grupo Sports 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 Grupo Sports World, you can compare the effects of market volatilities on Delta Air and Grupo Sports 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 Grupo Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Grupo Sports.
Diversification Opportunities for Delta Air and Grupo Sports
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Delta and Grupo is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Grupo Sports World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Sports World 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 Grupo Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Sports World has no effect on the direction of Delta Air i.e., Delta Air and Grupo Sports go up and down completely randomly.
Pair Corralation between Delta Air and Grupo Sports
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 2.03 times more return on investment than Grupo Sports. However, Delta Air is 2.03 times more volatile than Grupo Sports World. It trades about 0.3 of its potential returns per unit of risk. Grupo Sports World is currently generating about -0.04 per unit of risk. If you would invest 121,500 in Delta Air Lines on November 2, 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. Grupo Sports World
Performance |
| Timeline |
| Delta Air Lines |
| Grupo Sports World |
Delta Air and Grupo Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Grupo Sports
The main advantage of trading using opposite Delta Air and Grupo Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Grupo Sports 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 Grupo Sports will offset losses from the drop in Grupo Sports' long position.| Delta Air vs. DXC Technology | Delta Air vs. UnitedHealth Group Incorporated | Delta Air vs. Verizon Communications | Delta Air vs. New Oriental Education |
| Grupo Sports vs. CVS Health | Grupo Sports vs. Grupo Industrial Saltillo | Grupo Sports vs. Micron Technology | Grupo Sports vs. Grupo Hotelero Santa |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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