Correlation Between Delta Air and Far East

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

Diversification Opportunities for Delta Air and Far East

0.0

Correlation Coefficient

Delta Air  Far East

Pay attention - limited upside

The 3 months correlation between Delta and Far is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Far East Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far East Horizon 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 Far East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far East Horizon has no effect on the direction of Delta Air i.e., Delta Air and Far East go up and down completely randomly.

Pair Corralation between Delta Air and Far East

If you would invest  0.00  in Far East Horizon on December 20, 2024 and sell it today you would earn a total of  0.00  from holding Far East Horizon or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Delta Air Lines  vs.  Far East Horizon

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 uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Far East Horizon

Risk-Adjusted Performance

Modest

Over the last 90 days Far East Horizon has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Far East 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 Far East

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

The idea behind Delta Air Lines and Far East Horizon 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.

Check out your portfolio center.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.