Correlation Between Delta Air and Gentera SAB

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

Diversification Opportunities for Delta Air and Gentera SAB

0.0

Correlation Coefficient

Delta Air  Gentera SAB

Pay attention - limited upside

The 3 months correlation between Delta and Gentera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Gentera SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentera SAB de 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 Gentera SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentera SAB de has no effect on the direction of Delta Air i.e., Delta Air and Gentera SAB go up and down completely randomly.

Pair Corralation between Delta Air and Gentera SAB

Considering the 90-day investment horizon Delta Air Lines is expected to generate 0.96 times more return on investment than Gentera SAB. However, Delta Air Lines is 1.04 times less risky than Gentera SAB. It trades about 0.08 of its potential returns per unit of risk. Gentera SAB de is currently generating about 0.01 per unit of risk. If you would invest  4,232  in Delta Air Lines on December 2, 2024 and sell it today you would earn a total of  1,780  from holding Delta Air Lines or generate 42.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.28%
Values	Daily Returns

Delta Air Lines  vs.  Gentera SAB de

Delta Air Lines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delta Air Lines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Delta Air is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Gentera SAB de

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gentera SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Gentera SAB is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Delta Air and Gentera SAB

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

The idea behind Delta Air Lines and Gentera SAB de 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.