Correlation Between Delta Air and H World
Can any of the company-specific risk be diversified away by investing in both Delta Air and H World 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 H World 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 H World Group, you can compare the effects of market volatilities on Delta Air and H World 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 H World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and H World.
Diversification Opportunities for Delta Air and H World
Pay attention - limited upside
The 3 months correlation between Delta and CL4A is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and H World Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H World Group 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 H World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H World Group has no effect on the direction of Delta Air i.e., Delta Air and H World go up and down completely randomly.
Pair Corralation between Delta Air and H World
Assuming the 90 days horizon Delta Air Lines is expected to generate 0.8 times more return on investment than H World. However, Delta Air Lines is 1.25 times less risky than H World. It trades about 0.06 of its potential returns per unit of risk. H World Group is currently generating about -0.01 per unit of risk. If you would invest 3,545 in Delta Air Lines on October 13, 2024 and sell it today you would earn a total of 2,461 from holding Delta Air Lines or generate 69.42% 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. H World Group
Performance |
| Timeline |
| Delta Air Lines |
| H World Group |
Delta Air and H World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and H World
The main advantage of trading using opposite Delta Air and H World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, H World 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 H World will offset losses from the drop in H World's long position.| Delta Air vs. Warner Music Group | Delta Air vs. Tencent Music Entertainment | Delta Air vs. COFCO Joycome Foods | Delta Air vs. INDOFOOD AGRI RES |
| H World vs. Delta Air Lines | H World vs. Hyrican Informationssysteme Aktiengesellschaft | H World vs. British American Tobacco | H World vs. SOGECLAIR SA INH |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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