Correlation Between Delta Air and SYLVANIA PLAT

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

Diversification Opportunities for Delta Air and SYLVANIA PLAT

-0.18

Correlation Coefficient

Delta Air  SYLVANIA PLAT

Good diversification

The 3 months correlation between Delta and SYLVANIA is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and SYLVANIA PLAT DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYLVANIA PLAT DL 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 SYLVANIA PLAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYLVANIA PLAT DL has no effect on the direction of Delta Air i.e., Delta Air and SYLVANIA PLAT go up and down completely randomly.

Pair Corralation between Delta Air and SYLVANIA PLAT

Assuming the 90 days horizon Delta Air Lines is expected to generate 0.51 times more return on investment than SYLVANIA PLAT. However, Delta Air Lines is 1.94 times less risky than SYLVANIA PLAT. It trades about 0.06 of its potential returns per unit of risk. SYLVANIA PLAT DL is currently generating about -0.02 per unit of risk. If you would invest  3,424  in Delta Air Lines on October 10, 2024 and sell it today you would earn a total of  2,281  from holding Delta Air Lines or generate 66.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Delta Air Lines  vs.  SYLVANIA PLAT DL

Delta Air Lines

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Delta Air reported solid returns over the last few months and may actually be approaching a breakup point.

SYLVANIA PLAT DL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SYLVANIA PLAT DL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SYLVANIA PLAT is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Delta Air and SYLVANIA PLAT

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

The idea behind Delta Air Lines and SYLVANIA PLAT DL 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.