Correlation Between Delta Air and Aterian
Can any of the company-specific risk be diversified away by investing in both Delta Air and Aterian 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 Aterian 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 Aterian, you can compare the effects of market volatilities on Delta Air and Aterian 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 Aterian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Aterian.
Diversification Opportunities for Delta Air and Aterian
Pay attention - limited upside
The 3 months correlation between Delta and Aterian is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Aterian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aterian 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 Aterian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aterian has no effect on the direction of Delta Air i.e., Delta Air and Aterian go up and down completely randomly.
Pair Corralation between Delta Air and Aterian
Considering the 90-day investment horizon Delta Air Lines is expected to generate 0.67 times more return on investment than Aterian. However, Delta Air Lines is 1.5 times less risky than Aterian. It trades about 0.27 of its potential returns per unit of risk. Aterian is currently generating about -0.09 per unit of risk. If you would invest 5,689 in Delta Air Lines on September 3, 2024 and sell it today you would earn a total of 693.00 from holding Delta Air Lines or generate 12.18% 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. Aterian
Performance |
| Timeline |
| Delta Air Lines |
| Aterian |
Delta Air and Aterian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Aterian
The main advantage of trading using opposite Delta Air and Aterian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Aterian 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 Aterian will offset losses from the drop in Aterian's long position.| Delta Air vs. Copa Holdings SA | Delta Air vs. SkyWest | Delta Air vs. Air Transport Services | Delta Air vs. Mesa Air Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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