Correlation Between Delta Air and Lupatech
Can any of the company-specific risk be diversified away by investing in both Delta Air and Lupatech 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 Lupatech 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 Lupatech SA, you can compare the effects of market volatilities on Delta Air and Lupatech 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 Lupatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Lupatech.
Diversification Opportunities for Delta Air and Lupatech
Excellent diversification
The 3 months correlation between Delta and Lupatech is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA 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 Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of Delta Air i.e., Delta Air and Lupatech go up and down completely randomly.
Pair Corralation between Delta Air and Lupatech
Assuming the 90 days trading horizon Delta Air Lines is expected to generate 1.16 times more return on investment than Lupatech. However, Delta Air is 1.16 times more volatile than Lupatech SA. It trades about 0.3 of its potential returns per unit of risk. Lupatech SA is currently generating about -0.09 per unit of risk. If you would invest 30,798 in Delta Air Lines on August 26, 2024 and sell it today you would earn a total of 5,906 from holding Delta Air Lines or generate 19.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. Lupatech SA
Performance |
| Timeline |
| Delta Air Lines |
| Lupatech SA |
Delta Air and Lupatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Lupatech
The main advantage of trading using opposite Delta Air and Lupatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Lupatech 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 Lupatech will offset losses from the drop in Lupatech's long position.| Delta Air vs. Healthpeak Properties | Delta Air vs. Zoom Video Communications | Delta Air vs. Verizon Communications | Delta Air vs. Electronic Arts |
| Lupatech vs. Mitsubishi UFJ Financial | Lupatech vs. Sumitomo Mitsui Financial | Lupatech vs. Toyota Motor | Lupatech vs. Banco Santander Chile |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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