Correlation Between Delta Air and Kerry Logistics

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

Diversification Opportunities for Delta Air and Kerry Logistics

0.16

Correlation Coefficient

Delta Air  Kerry Logistics

Average diversification

The 3 months correlation between Delta and Kerry is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Kerry Logistics Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerry Logistics Network 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 Kerry Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerry Logistics Network has no effect on the direction of Delta Air i.e., Delta Air and Kerry Logistics go up and down completely randomly.

Pair Corralation between Delta Air and Kerry Logistics

If you would invest  5,689  in Delta Air Lines on September 4, 2024 and sell it today you would earn a total of  652.00  from holding Delta Air Lines or generate 11.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Delta Air Lines  vs.  Kerry Logistics Network

Delta Air Lines

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 22 (%) 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.

Kerry Logistics Network

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kerry Logistics Network are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Kerry Logistics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delta Air and Kerry Logistics

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

The idea behind Delta Air Lines and Kerry Logistics Network 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.