Correlation Between Delta Air and BM Technologies
Can any of the company-specific risk be diversified away by investing in both Delta Air and BM Technologies 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 BM Technologies 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 BM Technologies WT, you can compare the effects of market volatilities on Delta Air and BM Technologies 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 BM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and BM Technologies.
Diversification Opportunities for Delta Air and BM Technologies
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Delta and BMTX-WT is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and BM Technologies WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BM Technologies WT 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 BM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BM Technologies WT has no effect on the direction of Delta Air i.e., Delta Air and BM Technologies go up and down completely randomly.
Pair Corralation between Delta Air and BM Technologies
Considering the 90-day investment horizon Delta Air is expected to generate 52.74 times less return on investment than BM Technologies. But when comparing it to its historical volatility, Delta Air Lines is 50.93 times less risky than BM Technologies. It trades about 0.13 of its potential returns per unit of risk. BM Technologies WT is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4.30 in BM Technologies WT on August 27, 2024 and sell it today you would earn a total of 41.70 from holding BM Technologies WT or generate 969.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 69.52% |
| Values | Daily Returns |
Delta Air Lines vs. BM Technologies WT
Performance |
| Timeline |
| Delta Air Lines |
| BM Technologies WT |
Delta Air and BM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and BM Technologies
The main advantage of trading using opposite Delta Air and BM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, BM Technologies 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 BM Technologies will offset losses from the drop in BM Technologies' long position.| Delta Air vs. American Airlines Group | Delta Air vs. Southwest Airlines | Delta Air vs. JetBlue Airways Corp | Delta Air vs. Spirit Airlines |
| BM Technologies vs. Copa Holdings SA | BM Technologies vs. United Airlines Holdings | BM Technologies vs. Delta Air Lines | BM Technologies vs. SkyWest |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |