Correlation Between European Metals and Delta Air
Can any of the company-specific risk be diversified away by investing in both European Metals and Delta Air 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 European Metals and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and Delta Air Lines, you can compare the effects of market volatilities on European Metals and Delta Air 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 European Metals with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Delta Air.
Diversification Opportunities for European Metals and Delta Air
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between European and Delta is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines and European Metals 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 European Metals Holdings are associated (or correlated) with Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of European Metals i.e., European Metals and Delta Air go up and down completely randomly.
Pair Corralation between European Metals and Delta Air
Assuming the 90 days trading horizon European Metals Holdings is expected to generate 2.56 times more return on investment than Delta Air. However, European Metals is 2.56 times more volatile than Delta Air Lines. It trades about 0.23 of its potential returns per unit of risk. Delta Air Lines is currently generating about -0.08 per unit of risk. If you would invest 725.00 in European Metals Holdings on October 11, 2024 and sell it today you would earn a total of 113.00 from holding European Metals Holdings or generate 15.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
European Metals Holdings vs. Delta Air Lines
Performance |
| Timeline |
| European Metals Holdings |
| Delta Air Lines |
European Metals and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and Delta Air
The main advantage of trading using opposite European Metals and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air's long position.| European Metals vs. Tyson Foods Cl | European Metals vs. Datagroup SE | European Metals vs. First Class Metals | European Metals vs. Dairy Farm International |
| Delta Air vs. Check Point Software | Delta Air vs. Bisichi Mining PLC | Delta Air vs. Lundin Mining Corp | Delta Air vs. European Metals 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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