Correlation Between Delta Air and PACIFIC

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

Diversification Opportunities for Delta Air and PACIFIC

0.34

Correlation Coefficient

Delta Air  PACIFIC

Weak diversification

The 3 months correlation between Delta and PACIFIC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and PACIFIC GAS AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC GAS AND 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 PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC GAS AND has no effect on the direction of Delta Air i.e., Delta Air and PACIFIC go up and down completely randomly.

Pair Corralation between Delta Air and PACIFIC

Considering the 90-day investment horizon Delta Air Lines is expected to under-perform the PACIFIC. In addition to that, Delta Air is 2.56 times more volatile than PACIFIC GAS AND. It trades about -0.14 of its total potential returns per unit of risk. PACIFIC GAS AND is currently generating about -0.13 per unit of volatility. If you would invest  7,498  in PACIFIC GAS AND on December 22, 2024 and sell it today you would lose (658.00) from holding PACIFIC GAS AND or give up 8.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.72%
Values	Daily Returns

Delta Air Lines  vs.  PACIFIC GAS AND

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.

PACIFIC GAS AND

Risk-Adjusted Performance

Very Weak

Over the last 90 days PACIFIC GAS AND has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for PACIFIC GAS AND investors.

Pair Trading with Delta Air and PACIFIC

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

The idea behind Delta Air Lines and PACIFIC GAS AND 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.