Correlation Between Delta Air and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Delta Air and Aegean Airlines 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 Delta Air and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Air Lines and Aegean Airlines SA, you can compare the effects of market volatilities on Delta Air and Aegean Airlines 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 Delta Air with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Aegean Airlines.
Diversification Opportunities for Delta Air and Aegean Airlines
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Delta and Aegean is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA and Delta Air 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 Delta Air Lines are associated (or correlated) with Aegean Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegean Airlines SA has no effect on the direction of Delta Air i.e., Delta Air and Aegean Airlines go up and down completely randomly.
Pair Corralation between Delta Air and Aegean Airlines
Assuming the 90 days horizon Delta Air Lines is expected to generate 1.62 times more return on investment than Aegean Airlines. However, Delta Air is 1.62 times more volatile than Aegean Airlines SA. It trades about 0.33 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.19 per unit of risk. If you would invest 5,029 in Delta Air Lines on August 27, 2024 and sell it today you would earn a total of 1,088 from holding Delta Air Lines or generate 21.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. Aegean Airlines SA
Performance |
| Timeline |
| Delta Air Lines |
| Aegean Airlines SA |
Delta Air and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Aegean Airlines
The main advantage of trading using opposite Delta Air and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Aegean Airlines 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 Aegean Airlines will offset losses from the drop in Aegean Airlines' long position.| Delta Air vs. ETFS Coffee ETC | Delta Air vs. Avanos Medical | Delta Air vs. Geratherm Medical AG | Delta Air vs. Merit Medical Systems |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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