Correlation Between Emerson Electric and Delta Air
Can any of the company-specific risk be diversified away by investing in both Emerson Electric 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 Emerson Electric and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Electric Co and Delta Air Lines, you can compare the effects of market volatilities on Emerson Electric 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 Emerson Electric with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Electric and Delta Air.
Diversification Opportunities for Emerson Electric and Delta Air
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Emerson and Delta is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Electric Co 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 Emerson Electric 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 Emerson Electric Co 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 Emerson Electric i.e., Emerson Electric and Delta Air go up and down completely randomly.
Pair Corralation between Emerson Electric and Delta Air
If you would invest 122,300 in Delta Air Lines on October 20, 2024 and sell it today you would earn a total of 14,229 from holding Delta Air Lines or generate 11.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Electric Co vs. Delta Air Lines
Performance |
| Timeline |
| Emerson Electric |
| Delta Air Lines |
Emerson Electric and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Electric and Delta Air
The main advantage of trading using opposite Emerson Electric and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Electric 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.| Emerson Electric vs. iShares Global Timber | Emerson Electric vs. Vanguard World | Emerson Electric vs. iShares Trust | Emerson Electric vs. iShares Trust |
| Delta Air vs. Grupo Hotelero Santa | Delta Air vs. Capital One Financial | Delta Air vs. McEwen Mining | Delta Air vs. Ameriprise Financial |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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