Correlation Between DELTA AIR and Plastic Omnium
Can any of the company-specific risk be diversified away by investing in both DELTA AIR and Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium, you can compare the effects of market volatilities on DELTA AIR and Plastic Omnium 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 Plastic Omnium. Check out your portfolio center. Please also check ongoing floating volatility patterns of DELTA AIR and Plastic Omnium.
Diversification Opportunities for DELTA AIR and Plastic Omnium
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DELTA and Plastic is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding DELTA AIR LINES and Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 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 Plastic Omnium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastic Omnium has no effect on the direction of DELTA AIR i.e., DELTA AIR and Plastic Omnium go up and down completely randomly.
Pair Corralation between DELTA AIR and Plastic Omnium
Assuming the 90 days trading horizon DELTA AIR is expected to generate 3.3 times less return on investment than Plastic Omnium. But when comparing it to its historical volatility, DELTA AIR LINES is 1.17 times less risky than Plastic Omnium. It trades about 0.09 of its potential returns per unit of risk. Plastic Omnium is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 863.00 in Plastic Omnium on October 30, 2024 and sell it today you would earn a total of 222.00 from holding Plastic Omnium or generate 25.72% 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. Plastic Omnium
Performance |
| Timeline |
| DELTA AIR LINES |
| Plastic Omnium |
DELTA AIR and Plastic Omnium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DELTA AIR and Plastic Omnium
The main advantage of trading using opposite DELTA AIR and Plastic Omnium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DELTA AIR position performs unexpectedly, Plastic Omnium 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 Plastic Omnium will offset losses from the drop in Plastic Omnium's long position.| DELTA AIR vs. Lery Seafood Group | DELTA AIR vs. SENECA FOODS A | DELTA AIR vs. UNITED RENTALS | DELTA AIR vs. FUYO GENERAL LEASE |
| Plastic Omnium vs. Computershare Limited | Plastic Omnium vs. TreeHouse Foods | Plastic Omnium vs. Axfood AB | Plastic Omnium vs. Entravision Communications |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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