Correlation Between Delta Air and ORMAT TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Delta Air and ORMAT 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 Delta Air and ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES, you can compare the effects of market volatilities on Delta Air and ORMAT 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 Delta Air with a short position of ORMAT TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and ORMAT TECHNOLOGIES.
Diversification Opportunities for Delta Air and ORMAT TECHNOLOGIES
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Delta and ORMAT is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and ORMAT TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORMAT TECHNOLOGIES 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 ORMAT TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORMAT TECHNOLOGIES has no effect on the direction of Delta Air i.e., Delta Air and ORMAT TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Delta Air and ORMAT TECHNOLOGIES
Assuming the 90 days horizon Delta Air Lines is expected to generate 1.64 times more return on investment than ORMAT TECHNOLOGIES. However, Delta Air is 1.64 times more volatile than ORMAT TECHNOLOGIES. It trades about 0.27 of its potential returns per unit of risk. ORMAT TECHNOLOGIES is currently generating about -0.26 per unit of risk. If you would invest 5,870 in Delta Air Lines on October 14, 2024 and sell it today you would earn a total of 736.00 from holding Delta Air Lines or generate 12.54% 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. ORMAT TECHNOLOGIES
Performance |
| Timeline |
| Delta Air Lines |
| ORMAT TECHNOLOGIES |
Delta Air and ORMAT TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and ORMAT TECHNOLOGIES
The main advantage of trading using opposite Delta Air and ORMAT TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, ORMAT 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 ORMAT TECHNOLOGIES will offset losses from the drop in ORMAT TECHNOLOGIES's long position.| Delta Air vs. Siamgas And Petrochemicals | Delta Air vs. Southwest Airlines Co | Delta Air vs. X FAB Silicon Foundries | Delta Air vs. SOUTHWEST AIRLINES |
| ORMAT TECHNOLOGIES vs. SALESFORCE INC CDR | ORMAT TECHNOLOGIES vs. Delta Air Lines | ORMAT TECHNOLOGIES vs. Pentair plc | ORMAT TECHNOLOGIES vs. Wizz Air Holdings |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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