Correlation Between Delta Air and Gentera SAB
Can any of the company-specific risk be diversified away by investing in both Delta Air and Gentera SAB 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 Gentera SAB 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 Gentera SAB de, you can compare the effects of market volatilities on Delta Air and Gentera SAB 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 Gentera SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Gentera SAB.
Diversification Opportunities for Delta Air and Gentera SAB
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delta and Gentera is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Gentera SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentera SAB de 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 Gentera SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentera SAB de has no effect on the direction of Delta Air i.e., Delta Air and Gentera SAB go up and down completely randomly.
Pair Corralation between Delta Air and Gentera SAB
Considering the 90-day investment horizon Delta Air Lines is expected to generate 0.74 times more return on investment than Gentera SAB. However, Delta Air Lines is 1.36 times less risky than Gentera SAB. It trades about 0.08 of its potential returns per unit of risk. Gentera SAB de is currently generating about 0.05 per unit of risk. If you would invest 3,301 in Delta Air Lines on August 29, 2024 and sell it today you would earn a total of 3,061 from holding Delta Air Lines or generate 92.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 64.11% |
| Values | Daily Returns |
Delta Air Lines vs. Gentera SAB de
Performance |
| Timeline |
| Delta Air Lines |
| Gentera SAB de |
Delta Air and Gentera SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Gentera SAB
The main advantage of trading using opposite Delta Air and Gentera SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Gentera SAB 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 Gentera SAB will offset losses from the drop in Gentera SAB's long position.| Delta Air vs. JetBlue Airways Corp | Delta Air vs. SkyWest | Delta Air vs. International Consolidated Airlines | Delta Air vs. Spirit Airlines |
| Gentera SAB vs. Apple Inc | Gentera SAB vs. Microsoft | Gentera SAB vs. Alphabet Inc Class C | Gentera SAB vs. Meta Platforms |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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