Correlation Between Delta Air and INFICON Holding
Can any of the company-specific risk be diversified away by investing in both Delta Air and INFICON Holding 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 INFICON Holding 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 INFICON Holding AG, you can compare the effects of market volatilities on Delta Air and INFICON Holding 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 INFICON Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and INFICON Holding.
Diversification Opportunities for Delta Air and INFICON Holding
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delta and INFICON is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and INFICON Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFICON Holding AG 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 INFICON Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFICON Holding AG has no effect on the direction of Delta Air i.e., Delta Air and INFICON Holding go up and down completely randomly.
Pair Corralation between Delta Air and INFICON Holding
Considering the 90-day investment horizon Delta Air Lines is expected to generate 0.77 times more return on investment than INFICON Holding. However, Delta Air Lines is 1.29 times less risky than INFICON Holding. It trades about 0.08 of its potential returns per unit of risk. INFICON Holding AG is currently generating about 0.03 per unit of risk. If you would invest 3,265 in Delta Air Lines on September 13, 2024 and sell it today you would earn a total of 3,083 from holding Delta Air Lines or generate 94.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Delta Air Lines vs. INFICON Holding AG
Performance |
| Timeline |
| Delta Air Lines |
| INFICON Holding AG |
Delta Air and INFICON Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and INFICON Holding
The main advantage of trading using opposite Delta Air and INFICON Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, INFICON Holding 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 INFICON Holding will offset losses from the drop in INFICON Holding'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 |
| INFICON Holding vs. Copa Holdings SA | INFICON Holding vs. United Airlines Holdings | INFICON Holding vs. Delta Air Lines | INFICON Holding 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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