Correlation Between DELTA AIR and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both DELTA AIR and Synchrony Financial 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 Synchrony Financial 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 Synchrony Financial, you can compare the effects of market volatilities on DELTA AIR and Synchrony Financial 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 Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DELTA AIR and Synchrony Financial.
Diversification Opportunities for DELTA AIR and Synchrony Financial
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DELTA and Synchrony is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding DELTA AIR LINES and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial 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 Synchrony Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synchrony Financial has no effect on the direction of DELTA AIR i.e., DELTA AIR and Synchrony Financial go up and down completely randomly.
Pair Corralation between DELTA AIR and Synchrony Financial
Assuming the 90 days trading horizon DELTA AIR LINES is expected to generate 1.3 times more return on investment than Synchrony Financial. However, DELTA AIR is 1.3 times more volatile than Synchrony Financial. It trades about 0.09 of its potential returns per unit of risk. Synchrony Financial is currently generating about 0.07 per unit of risk. If you would invest 6,016 in DELTA AIR LINES on October 30, 2024 and sell it today you would earn a total of 401.00 from holding DELTA AIR LINES or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DELTA AIR LINES vs. Synchrony Financial
Performance |
| Timeline |
| DELTA AIR LINES |
| Synchrony Financial |
DELTA AIR and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DELTA AIR and Synchrony Financial
The main advantage of trading using opposite DELTA AIR and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DELTA AIR position performs unexpectedly, Synchrony Financial 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 Synchrony Financial will offset losses from the drop in Synchrony Financial'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 |
| Synchrony Financial vs. SIERRA METALS | Synchrony Financial vs. The Boston Beer | Synchrony Financial vs. Suntory Beverage Food | Synchrony Financial vs. SAN MIGUEL BREWERY |
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.
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