Correlation Between Delta Air and JD Sports
Can any of the company-specific risk be diversified away by investing in both Delta Air and JD Sports 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 JD Sports 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 JD Sports Fashion, you can compare the effects of market volatilities on Delta Air and JD Sports 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 JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and JD Sports.
Diversification Opportunities for Delta Air and JD Sports
Pay attention - limited upside
The 3 months correlation between Delta and JDSPY is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and JD Sports Fashion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Sports Fashion 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 JD Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Sports Fashion has no effect on the direction of Delta Air i.e., Delta Air and JD Sports go up and down completely randomly.
Pair Corralation between Delta Air and JD Sports
Considering the 90-day investment horizon Delta Air Lines is expected to generate 0.46 times more return on investment than JD Sports. However, Delta Air Lines is 2.2 times less risky than JD Sports. It trades about 0.28 of its potential returns per unit of risk. JD Sports Fashion is currently generating about -0.3 per unit of risk. If you would invest 5,538 in Delta Air Lines on August 27, 2024 and sell it today you would earn a total of 796.00 from holding Delta Air Lines or generate 14.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. JD Sports Fashion
Performance |
| Timeline |
| Delta Air Lines |
| JD Sports Fashion |
Delta Air and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and JD Sports
The main advantage of trading using opposite Delta Air and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, JD Sports 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 JD Sports will offset losses from the drop in JD Sports' long position.| Delta Air vs. American Airlines Group | Delta Air vs. Southwest Airlines | Delta Air vs. JetBlue Airways Corp | Delta Air vs. Spirit Airlines |
| JD Sports vs. Burlington Stores | JD Sports vs. Childrens Place | JD Sports vs. Buckle Inc | JD Sports vs. Shoe Carnival |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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