Correlation Between First and Delta Air
Can any of the company-specific risk be diversified away by investing in both First 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 First and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Class Metals and Delta Air Lines, you can compare the effects of market volatilities on First 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 First with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of First and Delta Air.
Diversification Opportunities for First and Delta Air
Very weak diversification
The 3 months correlation between First and Delta is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding First Class Metals 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 First 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 First Class Metals 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 First i.e., First and Delta Air go up and down completely randomly.
Pair Corralation between First and Delta Air
Assuming the 90 days trading horizon First Class Metals is expected to under-perform the Delta Air. In addition to that, First is 1.46 times more volatile than Delta Air Lines. It trades about -0.33 of its total potential returns per unit of risk. Delta Air Lines is currently generating about 0.19 per unit of volatility. If you would invest 6,137 in Delta Air Lines on October 14, 2024 and sell it today you would earn a total of 588.00 from holding Delta Air Lines or generate 9.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
First Class Metals vs. Delta Air Lines
Performance |
| Timeline |
| First Class Metals |
| Delta Air Lines |
First and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First and Delta Air
The main advantage of trading using opposite First and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First 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.| First vs. Sunny Optical Technology | First vs. CNH Industrial NV | First vs. Alfa Financial Software | First vs. Aptitude Software Group |
| Delta Air vs. Panther Metals PLC | Delta Air vs. First Class Metals | Delta Air vs. Dairy Farm International | Delta Air vs. Roebuck Food Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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