Correlation Between Edinburgh Investment and Delta Air

Can any of the company-specific risk be diversified away by investing in both Edinburgh Investment and Delta Air 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 Edinburgh Investment and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Edinburgh Investment Trust and Delta Air Lines, you can compare the effects of market volatilities on Edinburgh Investment and Delta Air 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 Edinburgh Investment with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edinburgh Investment and Delta Air.

Diversification Opportunities for Edinburgh Investment and Delta Air

0.24

Correlation Coefficient

Edinburgh Investment  Delta Air

Modest diversification

The 3 months correlation between Edinburgh and Delta is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Edinburgh Investment Trust and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines and Edinburgh Investment 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 Edinburgh Investment Trust are associated (or correlated) with Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Edinburgh Investment i.e., Edinburgh Investment and Delta Air go up and down completely randomly.

Pair Corralation between Edinburgh Investment and Delta Air

Assuming the 90 days trading horizon Edinburgh Investment Trust is expected to generate 0.28 times more return on investment than Delta Air. However, Edinburgh Investment Trust is 3.61 times less risky than Delta Air. It trades about 0.01 of its potential returns per unit of risk. Delta Air Lines is currently generating about -0.16 per unit of risk. If you would invest  73,527  in Edinburgh Investment Trust on December 24, 2024 and sell it today you would earn a total of  173.00  from holding Edinburgh Investment Trust or generate 0.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Edinburgh Investment Trust  vs.  Delta Air Lines

Edinburgh Investment

Risk-Adjusted Performance

Weak

Over the last 90 days Edinburgh Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Edinburgh Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Edinburgh Investment and Delta Air

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

The idea behind Edinburgh Investment Trust and Delta Air Lines 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.