Correlation Between Delta Air and Oxford Lane
Can any of the company-specific risk be diversified away by investing in both Delta Air and Oxford Lane 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 Oxford Lane 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 Oxford Lane Capital, you can compare the effects of market volatilities on Delta Air and Oxford Lane 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 Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Oxford Lane.
Diversification Opportunities for Delta Air and Oxford Lane
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Delta and Oxford is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Oxford Lane Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Lane Capital 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 Oxford Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Lane Capital has no effect on the direction of Delta Air i.e., Delta Air and Oxford Lane go up and down completely randomly.
Pair Corralation between Delta Air and Oxford Lane
Considering the 90-day investment horizon Delta Air Lines is expected to generate 7.03 times more return on investment than Oxford Lane. However, Delta Air is 7.03 times more volatile than Oxford Lane Capital. It trades about 0.31 of its potential returns per unit of risk. Oxford Lane Capital is currently generating about -0.12 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 911.00 from holding Delta Air Lines or generate 16.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. Oxford Lane Capital
Performance |
| Timeline |
| Delta Air Lines |
| Oxford Lane Capital |
Delta Air and Oxford Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Oxford Lane
The main advantage of trading using opposite Delta Air and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Oxford Lane 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 Oxford Lane will offset losses from the drop in Oxford Lane's long position.| Delta Air vs. American Airlines Group | Delta Air vs. Southwest Airlines | Delta Air vs. JetBlue Airways Corp | Delta Air vs. Spirit Airlines |
| Oxford Lane vs. Copa Holdings SA | Oxford Lane vs. United Airlines Holdings | Oxford Lane vs. Delta Air Lines | Oxford Lane 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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