Correlation Between DELTA AIR and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both DELTA AIR and Lifeway Foods 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 Lifeway Foods 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 Lifeway Foods, you can compare the effects of market volatilities on DELTA AIR and Lifeway Foods 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 Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of DELTA AIR and Lifeway Foods.
Diversification Opportunities for DELTA AIR and Lifeway Foods
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DELTA and Lifeway is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding DELTA AIR LINES and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods 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 Lifeway Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeway Foods has no effect on the direction of DELTA AIR i.e., DELTA AIR and Lifeway Foods go up and down completely randomly.
Pair Corralation between DELTA AIR and Lifeway Foods
Assuming the 90 days trading horizon DELTA AIR LINES is expected to generate 0.89 times more return on investment than Lifeway Foods. However, DELTA AIR LINES is 1.12 times less risky than Lifeway Foods. It trades about -0.01 of its potential returns per unit of risk. Lifeway Foods is currently generating about -0.13 per unit of risk. If you would invest 6,005 in DELTA AIR LINES on September 28, 2024 and sell it today you would lose (35.00) from holding DELTA AIR LINES or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
DELTA AIR LINES vs. Lifeway Foods
Performance |
| Timeline |
| DELTA AIR LINES |
| Lifeway Foods |
DELTA AIR and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DELTA AIR and Lifeway Foods
The main advantage of trading using opposite DELTA AIR and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DELTA AIR position performs unexpectedly, Lifeway Foods 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 Lifeway Foods will offset losses from the drop in Lifeway Foods' long position.| DELTA AIR vs. Virtus Investment Partners | DELTA AIR vs. Japan Asia Investment | DELTA AIR vs. APPLIED MATERIALS | DELTA AIR vs. Materialise NV |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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