Correlation Between Delta Air and Hawaiian Holdings
Can any of the company-specific risk be diversified away by investing in both Delta Air and Hawaiian Holdings 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 Hawaiian Holdings 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 Hawaiian Holdings, you can compare the effects of market volatilities on Delta Air and Hawaiian Holdings 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 Hawaiian Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Hawaiian Holdings.
Diversification Opportunities for Delta Air and Hawaiian Holdings
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Delta and Hawaiian is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Hawaiian Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Holdings 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 Hawaiian Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Holdings has no effect on the direction of Delta Air i.e., Delta Air and Hawaiian Holdings go up and down completely randomly.
Pair Corralation between Delta Air and Hawaiian Holdings
Considering the 90-day investment horizon Delta Air is expected to generate 1.9 times less return on investment than Hawaiian Holdings. But when comparing it to its historical volatility, Delta Air Lines is 1.55 times less risky than Hawaiian Holdings. It trades about 0.1 of its potential returns per unit of risk. Hawaiian Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,367 in Hawaiian Holdings on August 24, 2024 and sell it today you would earn a total of 433.00 from holding Hawaiian Holdings or generate 31.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 63.2% |
| Values | Daily Returns |
Delta Air Lines vs. Hawaiian Holdings
Performance |
| Timeline |
| Delta Air Lines |
| Hawaiian Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Delta Air and Hawaiian Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Hawaiian Holdings
The main advantage of trading using opposite Delta Air and Hawaiian Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Hawaiian Holdings 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 Hawaiian Holdings will offset losses from the drop in Hawaiian Holdings' long position.| Delta Air vs. American Airlines Group | Delta Air vs. Southwest Airlines | Delta Air vs. JetBlue Airways Corp | Delta Air vs. Spirit Airlines |
| Hawaiian Holdings vs. Southwest Airlines | Hawaiian Holdings vs. JetBlue Airways Corp | Hawaiian Holdings vs. United Airlines Holdings | Hawaiian Holdings vs. Delta Air Lines |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |