Correlation Between Delta Air and Queen City

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

Diversification Opportunities for Delta Air and Queen City

-0.63

Correlation Coefficient

Delta Air  Queen City

Excellent diversification

The 3 months correlation between Delta and Queen is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Queen City Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queen City Investments 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 Queen City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queen City Investments has no effect on the direction of Delta Air i.e., Delta Air and Queen City go up and down completely randomly.

Pair Corralation between Delta Air and Queen City

Considering the 90-day investment horizon Delta Air Lines is expected to under-perform the Queen City. In addition to that, Delta Air is 1.84 times more volatile than Queen City Investments. It trades about -0.12 of its total potential returns per unit of risk. Queen City Investments is currently generating about 0.06 per unit of volatility. If you would invest  131,000  in Queen City Investments on December 24, 2024 and sell it today you would earn a total of  7,000  from holding Queen City Investments or generate 5.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Delta Air Lines  vs.  Queen City Investments

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 conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Queen City Investments

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Queen City Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Queen City is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Delta Air and Queen City

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

The idea behind Delta Air Lines and Queen City Investments 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.