Correlation Between Deutsche Lufthansa and Delta Technologies
Can any of the company-specific risk be diversified away by investing in both Deutsche Lufthansa and Delta Technologies 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 Deutsche Lufthansa and Delta Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Lufthansa AG and Delta Technologies Nyrt, you can compare the effects of market volatilities on Deutsche Lufthansa and Delta Technologies 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 Deutsche Lufthansa with a short position of Delta Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Lufthansa and Delta Technologies.
Diversification Opportunities for Deutsche Lufthansa and Delta Technologies
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Deutsche and Delta is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Lufthansa AG and Delta Technologies Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Technologies Nyrt and Deutsche Lufthansa 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 Deutsche Lufthansa AG are associated (or correlated) with Delta Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Technologies Nyrt has no effect on the direction of Deutsche Lufthansa i.e., Deutsche Lufthansa and Delta Technologies go up and down completely randomly.
Pair Corralation between Deutsche Lufthansa and Delta Technologies
Assuming the 90 days trading horizon Deutsche Lufthansa AG is expected to under-perform the Delta Technologies. In addition to that, Deutsche Lufthansa is 2.21 times more volatile than Delta Technologies Nyrt. It trades about -0.24 of its total potential returns per unit of risk. Delta Technologies Nyrt is currently generating about -0.08 per unit of volatility. If you would invest 7,080 in Delta Technologies Nyrt on August 29, 2024 and sell it today you would lose (180.00) from holding Delta Technologies Nyrt or give up 2.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
Deutsche Lufthansa AG vs. Delta Technologies Nyrt
Performance |
| Timeline |
| Deutsche Lufthansa |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Delta Technologies Nyrt |
Deutsche Lufthansa and Delta Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Lufthansa and Delta Technologies
The main advantage of trading using opposite Deutsche Lufthansa and Delta Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Lufthansa position performs unexpectedly, Delta Technologies 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 Technologies will offset losses from the drop in Delta Technologies' long position.| Deutsche Lufthansa vs. OTP Bank Nyrt | Deutsche Lufthansa vs. NordTelekom Telecommunications Service | Deutsche Lufthansa vs. Infineon Technologies AG | Deutsche Lufthansa vs. Nutex Investments PLC |
| Delta Technologies vs. NordTelekom Telecommunications Service | Delta Technologies vs. CIG Pannonia Life | Delta Technologies vs. Infineon Technologies AG | Delta Technologies vs. Nutex Investments PLC |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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