Correlation Between Delta Air and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Delta Air and Goldman Sachs 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 Goldman Sachs 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 The Goldman Sachs, you can compare the effects of market volatilities on Delta Air and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Goldman Sachs.
Diversification Opportunities for Delta Air and Goldman Sachs
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Delta and Goldman is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs has no effect on the direction of Delta Air i.e., Delta Air and Goldman Sachs go up and down completely randomly.
Pair Corralation between Delta Air and Goldman Sachs
Assuming the 90 days trading horizon Delta Air is expected to generate 2.88 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Delta Air Lines is 1.04 times less risky than Goldman Sachs. It trades about 0.06 of its potential returns per unit of risk. The Goldman Sachs is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 11,371 in The Goldman Sachs on September 13, 2024 and sell it today you would earn a total of 849.00 from holding The Goldman Sachs or generate 7.47% 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. The Goldman Sachs
Performance |
| Timeline |
| Delta Air Lines |
| Goldman Sachs |
Delta Air and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Goldman Sachs
The main advantage of trading using opposite Delta Air and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Delta Air vs. Southwest Airlines Co | Delta Air vs. United Airlines Holdings | Delta Air vs. American Airlines Group |
| Goldman Sachs vs. Credit Acceptance | Goldman Sachs vs. Paycom Software | Goldman Sachs vs. Prudential Financial | Goldman Sachs vs. Bio Techne |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Transaction History View history of all your transactions and understand their impact on performance |