Correlation Between Delta Air and Signature Bank
Can any of the company-specific risk be diversified away by investing in both Delta Air and Signature Bank 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 Signature Bank 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 Signature Bank, you can compare the effects of market volatilities on Delta Air and Signature Bank 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 Signature Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Signature Bank.
Diversification Opportunities for Delta Air and Signature Bank
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Delta and Signature is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Signature Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signature Bank 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 Signature Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signature Bank has no effect on the direction of Delta Air i.e., Delta Air and Signature Bank go up and down completely randomly.
Pair Corralation between Delta Air and Signature Bank
If you would invest 5,689 in Delta Air Lines on September 4, 2024 and sell it today you would earn a total of 652.00 from holding Delta Air Lines or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Delta Air Lines vs. Signature Bank
Performance |
| Timeline |
| Delta Air Lines |
| Signature Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Delta Air and Signature Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Signature Bank
The main advantage of trading using opposite Delta Air and Signature Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Signature Bank 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 Signature Bank will offset losses from the drop in Signature Bank'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 |
| Signature Bank vs. Biglari Holdings | Signature Bank vs. CAVA Group, | Signature Bank vs. Torm PLC Class | Signature Bank vs. Stepan Company |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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