Correlation Between DELTA AIR and Steel Dynamics
Can any of the company-specific risk be diversified away by investing in both DELTA AIR and Steel Dynamics 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 Steel Dynamics 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 Steel Dynamics, you can compare the effects of market volatilities on DELTA AIR and Steel Dynamics 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 Steel Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of DELTA AIR and Steel Dynamics.
Diversification Opportunities for DELTA AIR and Steel Dynamics
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DELTA and Steel is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding DELTA AIR LINES and Steel Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Dynamics 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 Steel Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Dynamics has no effect on the direction of DELTA AIR i.e., DELTA AIR and Steel Dynamics go up and down completely randomly.
Pair Corralation between DELTA AIR and Steel Dynamics
Assuming the 90 days trading horizon DELTA AIR LINES is expected to generate 0.84 times more return on investment than Steel Dynamics. However, DELTA AIR LINES is 1.2 times less risky than Steel Dynamics. It trades about 0.25 of its potential returns per unit of risk. Steel Dynamics is currently generating about 0.17 per unit of risk. If you would invest 5,251 in DELTA AIR LINES on September 1, 2024 and sell it today you would earn a total of 765.00 from holding DELTA AIR LINES or generate 14.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
DELTA AIR LINES vs. Steel Dynamics
Performance |
| Timeline |
| DELTA AIR LINES |
| Steel Dynamics |
DELTA AIR and Steel Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DELTA AIR and Steel Dynamics
The main advantage of trading using opposite DELTA AIR and Steel Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DELTA AIR position performs unexpectedly, Steel Dynamics 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 Steel Dynamics will offset losses from the drop in Steel Dynamics' long position.| DELTA AIR vs. SIVERS SEMICONDUCTORS AB | DELTA AIR vs. Darden Restaurants | DELTA AIR vs. Reliance Steel Aluminum | DELTA AIR vs. Q2M Managementberatung AG |
| Steel Dynamics vs. Aedas Homes SA | Steel Dynamics vs. MTI WIRELESS EDGE | Steel Dynamics vs. INVITATION HOMES DL | Steel Dynamics vs. LGI Homes |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |