Correlation Between Spotify Technology and Delta Air
Can any of the company-specific risk be diversified away by investing in both Spotify Technology and Delta Air 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 Spotify Technology and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spotify Technology SA and Delta Air Lines, you can compare the effects of market volatilities on Spotify Technology and Delta Air 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 Spotify Technology with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and Delta Air.
Diversification Opportunities for Spotify Technology and Delta Air
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Spotify and Delta is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines and Spotify Technology 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 Spotify Technology SA are associated (or correlated) with Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Spotify Technology i.e., Spotify Technology and Delta Air go up and down completely randomly.
Pair Corralation between Spotify Technology and Delta Air
Assuming the 90 days trading horizon Spotify Technology SA is expected to generate 1.64 times more return on investment than Delta Air. However, Spotify Technology is 1.64 times more volatile than Delta Air Lines. It trades about 0.17 of its potential returns per unit of risk. Delta Air Lines is currently generating about -0.22 per unit of risk. If you would invest 75,530 in Spotify Technology SA on November 28, 2024 and sell it today you would earn a total of 9,470 from holding Spotify Technology SA or generate 12.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spotify Technology SA vs. Delta Air Lines
Performance |
| Timeline |
| Spotify Technology |
| Delta Air Lines |
Spotify Technology and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spotify Technology and Delta Air
The main advantage of trading using opposite Spotify Technology and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air's long position.| Spotify Technology vs. Globus Medical, | Spotify Technology vs. Annaly Capital Management, | Spotify Technology vs. STMicroelectronics NV | Spotify Technology vs. British American Tobacco |
| Delta Air vs. METISA Metalrgica Timboense | Delta Air vs. ON Semiconductor | Delta Air vs. Air Products and | Delta Air vs. Eastman Chemical |
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.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |