Correlation Between Jefferies Financial and Delta Air
Can any of the company-specific risk be diversified away by investing in both Jefferies Financial 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 Jefferies Financial and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jefferies Financial Group and Delta Air Lines, you can compare the effects of market volatilities on Jefferies Financial 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 Jefferies Financial with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and Delta Air.
Diversification Opportunities for Jefferies Financial and Delta Air
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jefferies and Delta is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies Financial Group 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 Jefferies Financial 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 Jefferies Financial Group 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 Jefferies Financial i.e., Jefferies Financial and Delta Air go up and down completely randomly.
Pair Corralation between Jefferies Financial and Delta Air
Assuming the 90 days trading horizon Jefferies Financial Group is expected to under-perform the Delta Air. In addition to that, Jefferies Financial is 1.22 times more volatile than Delta Air Lines. It trades about -0.16 of its total potential returns per unit of risk. Delta Air Lines is currently generating about 0.18 per unit of volatility. If you would invest 36,664 in Delta Air Lines on November 9, 2024 and sell it today you would earn a total of 3,256 from holding Delta Air Lines or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jefferies Financial Group vs. Delta Air Lines
Performance |
| Timeline |
| Jefferies Financial |
| Delta Air Lines |
Jefferies Financial and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jefferies Financial and Delta Air
The main advantage of trading using opposite Jefferies Financial and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jefferies Financial 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.| Jefferies Financial vs. Broadridge Financial Solutions, | Jefferies Financial vs. Take Two Interactive Software | Jefferies Financial vs. MAHLE Metal Leve | Jefferies Financial vs. STAG Industrial, |
| Delta Air vs. Broadridge Financial Solutions, | Delta Air vs. Microchip Technology Incorporated | Delta Air vs. Charter Communications | Delta Air vs. Zoom Video Communications |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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