Correlation Between DELTA AIR and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both DELTA AIR and Agnico Eagle 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 Agnico Eagle 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 Agnico Eagle Mines, you can compare the effects of market volatilities on DELTA AIR and Agnico Eagle 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 Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of DELTA AIR and Agnico Eagle.
Diversification Opportunities for DELTA AIR and Agnico Eagle
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DELTA and Agnico is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding DELTA AIR LINES and Agnico Eagle Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agnico Eagle Mines 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 Agnico Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agnico Eagle Mines has no effect on the direction of DELTA AIR i.e., DELTA AIR and Agnico Eagle go up and down completely randomly.
Pair Corralation between DELTA AIR and Agnico Eagle
Assuming the 90 days trading horizon DELTA AIR LINES is expected to generate 1.09 times more return on investment than Agnico Eagle. However, DELTA AIR is 1.09 times more volatile than Agnico Eagle Mines. It trades about 0.19 of its potential returns per unit of risk. Agnico Eagle Mines is currently generating about -0.02 per unit of risk. If you would invest 5,394 in DELTA AIR LINES on August 31, 2024 and sell it today you would earn a total of 622.00 from holding DELTA AIR LINES or generate 11.53% 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. Agnico Eagle Mines
Performance |
| Timeline |
| DELTA AIR LINES |
| Agnico Eagle Mines |
DELTA AIR and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DELTA AIR and Agnico Eagle
The main advantage of trading using opposite DELTA AIR and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DELTA AIR position performs unexpectedly, Agnico Eagle 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 Agnico Eagle will offset losses from the drop in Agnico Eagle's long position.| DELTA AIR vs. SPARTAN STORES | DELTA AIR vs. Ribbon Communications | DELTA AIR vs. QURATE RETAIL INC | DELTA AIR vs. SBA Communications Corp |
| Agnico Eagle vs. Summit Materials | Agnico Eagle vs. VULCAN MATERIALS | Agnico Eagle vs. SALESFORCE INC CDR | Agnico Eagle vs. Sumitomo Rubber Industries |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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