Correlation Between DELTA AIR and AIB Group
Can any of the company-specific risk be diversified away by investing in both DELTA AIR and AIB Group 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 AIB Group 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 AIB Group plc, you can compare the effects of market volatilities on DELTA AIR and AIB Group 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 AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of DELTA AIR and AIB Group.
Diversification Opportunities for DELTA AIR and AIB Group
Very weak diversification
The 3 months correlation between DELTA and AIB is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding DELTA AIR LINES and AIB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Group plc 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 AIB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Group plc has no effect on the direction of DELTA AIR i.e., DELTA AIR and AIB Group go up and down completely randomly.
Pair Corralation between DELTA AIR and AIB Group
Assuming the 90 days trading horizon DELTA AIR LINES is expected to under-perform the AIB Group. In addition to that, DELTA AIR is 2.53 times more volatile than AIB Group plc. It trades about -0.03 of its total potential returns per unit of risk. AIB Group plc is currently generating about 0.14 per unit of volatility. If you would invest 517.00 in AIB Group plc on October 1, 2024 and sell it today you would earn a total of 9.00 from holding AIB Group plc or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DELTA AIR LINES vs. AIB Group plc
Performance |
| Timeline |
| DELTA AIR LINES |
| AIB Group plc |
DELTA AIR and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DELTA AIR and AIB Group
The main advantage of trading using opposite DELTA AIR and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DELTA AIR position performs unexpectedly, AIB Group 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 AIB Group will offset losses from the drop in AIB Group's long position.The idea behind DELTA AIR LINES and AIB Group plc 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.| AIB Group vs. COFCO Joycome Foods | AIB Group vs. Westinghouse Air Brake | AIB Group vs. TYSON FOODS A | AIB Group vs. LIFEWAY FOODS |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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