Correlation Between Delta Air and SkyCity Entertainment
Can any of the company-specific risk be diversified away by investing in both Delta Air and SkyCity Entertainment 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 SkyCity Entertainment 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 SkyCity Entertainment Group, you can compare the effects of market volatilities on Delta Air and SkyCity Entertainment 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 SkyCity Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and SkyCity Entertainment.
Diversification Opportunities for Delta Air and SkyCity Entertainment
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Delta and SkyCity is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and SkyCity Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SkyCity Entertainment 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 SkyCity Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SkyCity Entertainment has no effect on the direction of Delta Air i.e., Delta Air and SkyCity Entertainment go up and down completely randomly.
Pair Corralation between Delta Air and SkyCity Entertainment
Considering the 90-day investment horizon Delta Air Lines is expected to generate 0.72 times more return on investment than SkyCity Entertainment. However, Delta Air Lines is 1.38 times less risky than SkyCity Entertainment. It trades about 0.09 of its potential returns per unit of risk. SkyCity Entertainment Group is currently generating about -0.05 per unit of risk. If you would invest 3,367 in Delta Air Lines on August 29, 2024 and sell it today you would earn a total of 3,047 from holding Delta Air Lines or generate 90.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.58% |
| Values | Daily Returns |
Delta Air Lines vs. SkyCity Entertainment Group
Performance |
| Timeline |
| Delta Air Lines |
| SkyCity Entertainment |
Delta Air and SkyCity Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and SkyCity Entertainment
The main advantage of trading using opposite Delta Air and SkyCity Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, SkyCity Entertainment 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 SkyCity Entertainment will offset losses from the drop in SkyCity Entertainment'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 |
| SkyCity Entertainment vs. Copa Holdings SA | SkyCity Entertainment vs. United Airlines Holdings | SkyCity Entertainment vs. Delta Air Lines | SkyCity Entertainment 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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