Correlation Between Delta Air and DFDS AS
Can any of the company-specific risk be diversified away by investing in both Delta Air and DFDS AS 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 DFDS AS 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 DFDS AS, you can compare the effects of market volatilities on Delta Air and DFDS AS 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 DFDS AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and DFDS AS.
Diversification Opportunities for Delta Air and DFDS AS
Pay attention - limited upside
The 3 months correlation between Delta and DFDS is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and DFDS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFDS AS 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 DFDS AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFDS AS has no effect on the direction of Delta Air i.e., Delta Air and DFDS AS go up and down completely randomly.
Pair Corralation between Delta Air and DFDS AS
Considering the 90-day investment horizon Delta Air Lines is expected to generate 0.88 times more return on investment than DFDS AS. However, Delta Air Lines is 1.13 times less risky than DFDS AS. It trades about 0.08 of its potential returns per unit of risk. DFDS AS is currently generating about -0.01 per unit of risk. If you would invest 3,241 in Delta Air Lines on September 12, 2024 and sell it today you would earn a total of 3,036 from holding Delta Air Lines or generate 93.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 99.8% |
Values | Daily Returns |
Delta Air Lines vs. DFDS AS
Performance |
Timeline |
Delta Air Lines |
DFDS AS |
Delta Air and DFDS AS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Delta Air and DFDS AS
The main advantage of trading using opposite Delta Air and DFDS AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, DFDS AS 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 DFDS AS will offset losses from the drop in DFDS AS's long position.Delta Air vs. Volaris | Delta Air vs. flyExclusive, | Delta Air vs. Alaska Air Group | Delta Air vs. Copa Holdings SA |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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