Correlation Between Delta Air and ENN Energy
Can any of the company-specific risk be diversified away by investing in both Delta Air and ENN Energy 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 ENN Energy 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 ENN Energy Holdings, you can compare the effects of market volatilities on Delta Air and ENN Energy 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 ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and ENN Energy.
Diversification Opportunities for Delta Air and ENN Energy
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Delta and ENN is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and ENN Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN Energy Holdings 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 ENN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN Energy Holdings has no effect on the direction of Delta Air i.e., Delta Air and ENN Energy go up and down completely randomly.
Pair Corralation between Delta Air and ENN Energy
Considering the 90-day investment horizon Delta Air Lines is expected to generate 1.32 times more return on investment than ENN Energy. However, Delta Air is 1.32 times more volatile than ENN Energy Holdings. It trades about 0.2 of its potential returns per unit of risk. ENN Energy Holdings is currently generating about -0.15 per unit of risk. If you would invest 6,142 in Delta Air Lines on November 9, 2024 and sell it today you would earn a total of 650.00 from holding Delta Air Lines or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. ENN Energy Holdings
Performance |
| Timeline |
| Delta Air Lines |
| ENN Energy Holdings |
Delta Air and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and ENN Energy
The main advantage of trading using opposite Delta Air and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, ENN Energy 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 ENN Energy will offset losses from the drop in ENN Energy'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 |
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 Stocks Directory module to find actively traded stocks across global markets.
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