Correlation Between DELTA AIR and Elis SA
Can any of the company-specific risk be diversified away by investing in both DELTA AIR and Elis SA 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 Elis SA 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 Elis SA, you can compare the effects of market volatilities on DELTA AIR and Elis SA 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 Elis SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of DELTA AIR and Elis SA.
Diversification Opportunities for DELTA AIR and Elis SA
Modest diversification
The 3 months correlation between DELTA and Elis is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding DELTA AIR LINES and Elis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elis 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 Elis SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elis SA has no effect on the direction of DELTA AIR i.e., DELTA AIR and Elis SA go up and down completely randomly.
Pair Corralation between DELTA AIR and Elis SA
Assuming the 90 days trading horizon DELTA AIR LINES is expected to generate 1.11 times more return on investment than Elis SA. However, DELTA AIR is 1.11 times more volatile than Elis SA. It trades about -0.13 of its potential returns per unit of risk. Elis SA is currently generating about -0.26 per unit of risk. If you would invest 6,176 in DELTA AIR LINES on September 15, 2024 and sell it today you would lose (320.00) from holding DELTA AIR LINES or give up 5.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DELTA AIR LINES vs. Elis SA
Performance |
| Timeline |
| DELTA AIR LINES |
| Elis SA |
DELTA AIR and Elis SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DELTA AIR and Elis SA
The main advantage of trading using opposite DELTA AIR and Elis SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DELTA AIR position performs unexpectedly, Elis SA 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 Elis SA will offset losses from the drop in Elis SA's long position.The idea behind DELTA AIR LINES and Elis SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Elis SA vs. Vishay Intertechnology | Elis SA vs. DELTA AIR LINES | Elis SA vs. Ryanair Holdings plc | Elis SA vs. Westinghouse Air Brake |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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