Correlation Between Delta Air and Check Point
Can any of the company-specific risk be diversified away by investing in both Delta Air and Check Point 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 Check Point 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 Check Point Software, you can compare the effects of market volatilities on Delta Air and Check Point 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 Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Check Point.
Diversification Opportunities for Delta Air and Check Point
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delta and Check is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software 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 Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of Delta Air i.e., Delta Air and Check Point go up and down completely randomly.
Pair Corralation between Delta Air and Check Point
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 1.73 times more return on investment than Check Point. However, Delta Air is 1.73 times more volatile than Check Point Software. It trades about 0.08 of its potential returns per unit of risk. Check Point Software is currently generating about 0.09 per unit of risk. If you would invest 20,173 in Delta Air Lines on October 27, 2024 and sell it today you would earn a total of 20,228 from holding Delta Air Lines or generate 100.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.74% |
| Values | Daily Returns |
Delta Air Lines vs. Check Point Software
Performance |
| Timeline |
| Delta Air Lines |
| Check Point Software |
Delta Air and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Check Point
The main advantage of trading using opposite Delta Air and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Check Point 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 Check Point will offset losses from the drop in Check Point's long position.| Delta Air vs. Palantir Technologies | Delta Air vs. Molson Coors Beverage | Delta Air vs. United Natural Foods, | Delta Air vs. Paycom Software |
| Check Point vs. G2D Investments | Check Point vs. Microchip Technology Incorporated | Check Point vs. Brpr Corporate Offices | Check Point vs. salesforce inc |
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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