Correlation Between Delta Air and BrightSpring Health
Can any of the company-specific risk be diversified away by investing in both Delta Air and BrightSpring Health 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 BrightSpring Health 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 BrightSpring Health Services,, you can compare the effects of market volatilities on Delta Air and BrightSpring Health 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 BrightSpring Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and BrightSpring Health.
Diversification Opportunities for Delta Air and BrightSpring Health
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Delta and BrightSpring is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and BrightSpring Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightSpring Health 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 BrightSpring Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrightSpring Health has no effect on the direction of Delta Air i.e., Delta Air and BrightSpring Health go up and down completely randomly.
Pair Corralation between Delta Air and BrightSpring Health
Considering the 90-day investment horizon Delta Air Lines is expected to generate 1.03 times more return on investment than BrightSpring Health. However, Delta Air is 1.03 times more volatile than BrightSpring Health Services,. It trades about -0.07 of its potential returns per unit of risk. BrightSpring Health Services, is currently generating about -0.2 per unit of risk. If you would invest 6,405 in Delta Air Lines on September 13, 2024 and sell it today you would lose (163.00) from holding Delta Air Lines or give up 2.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Delta Air Lines vs. BrightSpring Health Services,
Performance |
| Timeline |
| Delta Air Lines |
| BrightSpring Health |
Delta Air and BrightSpring Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and BrightSpring Health
The main advantage of trading using opposite Delta Air and BrightSpring Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, BrightSpring Health 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 BrightSpring Health will offset losses from the drop in BrightSpring Health's long position.| Delta Air vs. American Airlines Group | Delta Air vs. Southwest Airlines | Delta Air vs. JetBlue Airways Corp | Delta Air vs. United Airlines Holdings |
| BrightSpring Health vs. ATRenew Inc DRC | BrightSpring Health vs. Canlan Ice Sports | BrightSpring Health vs. Academy Sports Outdoors | BrightSpring Health 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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