Correlation Between Delta Air and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Delta Air and Compagnie Plastic 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 Compagnie Plastic 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 Compagnie Plastic Omnium, you can compare the effects of market volatilities on Delta Air and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Compagnie Plastic.
Diversification Opportunities for Delta Air and Compagnie Plastic
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Delta and Compagnie is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Delta Air i.e., Delta Air and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Delta Air and Compagnie Plastic
Assuming the 90 days horizon Delta Air Lines is expected to generate 1.14 times more return on investment than Compagnie Plastic. However, Delta Air is 1.14 times more volatile than Compagnie Plastic Omnium. It trades about 0.23 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about 0.16 per unit of risk. If you would invest 5,739 in Delta Air Lines on November 1, 2024 and sell it today you would earn a total of 736.00 from holding Delta Air Lines or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Delta Air Lines |
| Compagnie Plastic Omnium |
Delta Air and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Compagnie Plastic
The main advantage of trading using opposite Delta Air and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Delta Air vs. MAVEN WIRELESS SWEDEN | Delta Air vs. CENTURIA OFFICE REIT | Delta Air vs. United Natural Foods | Delta Air vs. PURE FOODS TASMANIA |
| Compagnie Plastic vs. CARDINAL HEALTH | Compagnie Plastic vs. HEALTHSTREAM | Compagnie Plastic vs. EIDESVIK OFFSHORE NK | Compagnie Plastic vs. PURETECH HEALTH 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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