Correlation Between Delta Air and Fidelity National
Can any of the company-specific risk be diversified away by investing in both Delta Air and Fidelity National 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 Fidelity National 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 Fidelity National Information, you can compare the effects of market volatilities on Delta Air and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Fidelity National.
Diversification Opportunities for Delta Air and Fidelity National
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Delta and Fidelity is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Delta Air i.e., Delta Air and Fidelity National go up and down completely randomly.
Pair Corralation between Delta Air and Fidelity National
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 3.0 times more return on investment than Fidelity National. However, Delta Air is 3.0 times more volatile than Fidelity National Information. It trades about 0.19 of its potential returns per unit of risk. Fidelity National Information is currently generating about -0.32 per unit of risk. If you would invest 33,810 in Delta Air Lines on August 31, 2024 and sell it today you would earn a total of 3,720 from holding Delta Air Lines or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. Fidelity National Information
Performance |
| Timeline |
| Delta Air Lines |
| Fidelity National |
Delta Air and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Fidelity National
The main advantage of trading using opposite Delta Air and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| Delta Air vs. Micron Technology | Delta Air vs. Paycom Software | Delta Air vs. Healthpeak Properties | Delta Air vs. BIONTECH SE DRN |
| Fidelity National vs. Fiserv Inc | Fidelity National vs. Cognizant Technology Solutions | Fidelity National vs. Fras le SA | Fidelity National vs. Energisa SA |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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