Correlation Between Inflection Point and Delta Air
Can any of the company-specific risk be diversified away by investing in both Inflection Point 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 Inflection Point and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and Delta Air Lines, you can compare the effects of market volatilities on Inflection Point 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 Inflection Point with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and Delta Air.
Diversification Opportunities for Inflection Point and Delta Air
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Inflection and Delta is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition 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 Inflection Point 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 Inflection Point Acquisition 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 Inflection Point i.e., Inflection Point and Delta Air go up and down completely randomly.
Pair Corralation between Inflection Point and Delta Air
Assuming the 90 days horizon Inflection Point is expected to generate 9.28 times less return on investment than Delta Air. But when comparing it to its historical volatility, Inflection Point Acquisition is 7.61 times less risky than Delta Air. It trades about 0.22 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 5,689 in Delta Air Lines on September 3, 2024 and sell it today you would earn a total of 693.00 from holding Delta Air Lines or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflection Point Acquisition vs. Delta Air Lines
Performance |
| Timeline |
| Inflection Point Acq |
| Delta Air Lines |
Inflection Point and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflection Point and Delta Air
The main advantage of trading using opposite Inflection Point and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point 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.| Inflection Point vs. Arrow Electronics | Inflection Point vs. BioNTech SE | Inflection Point vs. BJs Restaurants | Inflection Point vs. Yum Brands |
| Delta Air vs. JetBlue Airways Corp | Delta Air vs. Allegiant Travel | Delta Air vs. Copa Holdings SA | Delta Air vs. SkyWest |
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 CEOs Directory module to screen CEOs from public companies around the world.
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