Correlation Between Delta Air and Dividend

Can any of the company-specific risk be diversified away by investing in both Delta Air and Dividend 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 Dividend 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 Dividend 15 Split, you can compare the effects of market volatilities on Delta Air and Dividend 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 Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Dividend.

Diversification Opportunities for Delta Air and Dividend

0.82

Correlation Coefficient

Delta Air  Dividend

Very poor diversification

The 3 months correlation between Delta and Dividend is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Dividend 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend 15 Split 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 Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend 15 Split has no effect on the direction of Delta Air i.e., Delta Air and Dividend go up and down completely randomly.

Pair Corralation between Delta Air and Dividend

Considering the 90-day investment horizon Delta Air Lines is expected to under-perform the Dividend. In addition to that, Delta Air is 2.9 times more volatile than Dividend 15 Split. It trades about -0.11 of its total potential returns per unit of risk. Dividend 15 Split is currently generating about 0.21 per unit of volatility. If you would invest  348.00  in Dividend 15 Split on September 21, 2024 and sell it today you would earn a total of  10.00  from holding Dividend 15 Split or generate 2.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.65%
Values	Daily Returns

Delta Air Lines  vs.  Dividend 15 Split

Delta Air Lines

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Delta Air disclosed solid returns over the last few months and may actually be approaching a breakup point.

Dividend 15 Split

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend 15 Split are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Dividend may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Delta Air and Dividend

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

The idea behind Delta Air Lines and Dividend 15 Split 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.