Correlation Between Delta Air and Bakkt Holdings
Can any of the company-specific risk be diversified away by investing in both Delta Air and Bakkt Holdings 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 Bakkt Holdings 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 Bakkt Holdings Warrant, you can compare the effects of market volatilities on Delta Air and Bakkt Holdings 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 Bakkt Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Bakkt Holdings.
Diversification Opportunities for Delta Air and Bakkt Holdings
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Delta and Bakkt is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Bakkt Holdings Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakkt Holdings Warrant 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 Bakkt Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakkt Holdings Warrant has no effect on the direction of Delta Air i.e., Delta Air and Bakkt Holdings go up and down completely randomly.
Pair Corralation between Delta Air and Bakkt Holdings
Considering the 90-day investment horizon Delta Air is expected to generate 21.36 times less return on investment than Bakkt Holdings. But when comparing it to its historical volatility, Delta Air Lines is 11.0 times less risky than Bakkt Holdings. It trades about 0.04 of its potential returns per unit of risk. Bakkt Holdings Warrant is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 8.02 in Bakkt Holdings Warrant on December 5, 2024 and sell it today you would earn a total of 13.98 from holding Bakkt Holdings Warrant or generate 174.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.58% |
Values | Daily Returns |
Delta Air Lines vs. Bakkt Holdings Warrant
Performance |
Timeline |
Delta Air Lines |
Bakkt Holdings Warrant |
Delta Air and Bakkt Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Delta Air and Bakkt Holdings
The main advantage of trading using opposite Delta Air and Bakkt Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Bakkt Holdings 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 Bakkt Holdings will offset losses from the drop in Bakkt Holdings' long position.Delta Air vs. American Airlines Group | Delta Air vs. Southwest Airlines | Delta Air vs. JetBlue Airways Corp | Delta Air vs. United Airlines Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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