Correlation Between Optima Health and Delta Air
Can any of the company-specific risk be diversified away by investing in both Optima Health 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 Optima Health and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima Health plc and Delta Air Lines, you can compare the effects of market volatilities on Optima Health 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 Optima Health with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Delta Air.
Diversification Opportunities for Optima Health and Delta Air
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Optima and Delta is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc 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 Optima Health 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 Optima Health plc 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 Optima Health i.e., Optima Health and Delta Air go up and down completely randomly.
Pair Corralation between Optima Health and Delta Air
Assuming the 90 days trading horizon Optima Health plc is expected to under-perform the Delta Air. But the stock apears to be less risky and, when comparing its historical volatility, Optima Health plc is 3.84 times less risky than Delta Air. The stock trades about -0.23 of its potential returns per unit of risk. The Delta Air Lines is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 5,721 in Delta Air Lines on August 30, 2024 and sell it today you would earn a total of 651.00 from holding Delta Air Lines or generate 11.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima Health plc vs. Delta Air Lines
Performance |
| Timeline |
| Optima Health plc |
| Delta Air Lines |
Optima Health and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Health and Delta Air
The main advantage of trading using opposite Optima Health and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health 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.| Optima Health vs. Toyota Motor Corp | Optima Health vs. OTP Bank Nyrt | Optima Health vs. Cognizant Technology Solutions | Optima Health vs. Lendinvest PLC |
| Delta Air vs. Tungsten West PLC | Delta Air vs. Argo Group Limited | Delta Air vs. Hardide PLC | Delta Air vs. Versarien 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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