Correlation Between Delta Air and Stepstone
Can any of the company-specific risk be diversified away by investing in both Delta Air and Stepstone 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 Stepstone 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 Stepstone Group, you can compare the effects of market volatilities on Delta Air and Stepstone 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 Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Stepstone.
Diversification Opportunities for Delta Air and Stepstone
Almost no diversification
The 3 months correlation between Delta and Stepstone is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group 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 Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Delta Air i.e., Delta Air and Stepstone go up and down completely randomly.
Pair Corralation between Delta Air and Stepstone
Considering the 90-day investment horizon Delta Air Lines is expected to generate 1.01 times more return on investment than Stepstone. However, Delta Air is 1.01 times more volatile than Stepstone Group. It trades about 0.31 of its potential returns per unit of risk. Stepstone Group is currently generating about 0.16 per unit of risk. If you would invest 4,225 in Delta Air Lines on September 2, 2024 and sell it today you would earn a total of 2,157 from holding Delta Air Lines or generate 51.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. Stepstone Group
Performance |
| Timeline |
| Delta Air Lines |
| Stepstone Group |
Delta Air and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Stepstone
The main advantage of trading using opposite Delta Air and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone'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 |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |