Correlation Between Delta Air and Gaztransport

Can any of the company-specific risk be diversified away by investing in both Delta Air and Gaztransport 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 Gaztransport 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 Gaztransport et Technigaz, you can compare the effects of market volatilities on Delta Air and Gaztransport 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 Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Gaztransport.

Diversification Opportunities for Delta Air and Gaztransport

0.85

Correlation Coefficient

Delta Air  Gaztransport

Very poor diversification

The 3 months correlation between Delta and Gaztransport is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz 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 Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Delta Air i.e., Delta Air and Gaztransport go up and down completely randomly.

Pair Corralation between Delta Air and Gaztransport

Assuming the 90 days trading horizon Delta Air Lines is expected to under-perform the Gaztransport. In addition to that, Delta Air is 2.02 times more volatile than Gaztransport et Technigaz. It trades about -0.07 of its total potential returns per unit of risk. Gaztransport et Technigaz is currently generating about -0.09 per unit of volatility. If you would invest  13,455  in Gaztransport et Technigaz on September 17, 2024 and sell it today you would lose (280.00) from holding Gaztransport et Technigaz or give up 2.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Delta Air Lines  vs.  Gaztransport et Technigaz

Delta Air Lines

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Delta Air unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gaztransport et Technigaz

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Gaztransport may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Delta Air and Gaztransport

The main advantage of trading using opposite Delta Air and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.

The idea behind Delta Air Lines and Gaztransport et Technigaz pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.