Correlation Between Delta Air and HALSTEAD JAMES

Can any of the company-specific risk be diversified away by investing in both Delta Air and HALSTEAD JAMES 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 HALSTEAD JAMES 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 HALSTEAD JAMES LS 05, you can compare the effects of market volatilities on Delta Air and HALSTEAD JAMES 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 HALSTEAD JAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and HALSTEAD JAMES.

Diversification Opportunities for Delta Air and HALSTEAD JAMES

0.86

Correlation Coefficient

Delta Air  HALSTEAD JAMES

Very poor diversification

The 3 months correlation between Delta and HALSTEAD is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and HALSTEAD JAMES LS 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HALSTEAD JAMES LS 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 HALSTEAD JAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HALSTEAD JAMES LS has no effect on the direction of Delta Air i.e., Delta Air and HALSTEAD JAMES go up and down completely randomly.

Pair Corralation between Delta Air and HALSTEAD JAMES

Assuming the 90 days horizon Delta Air Lines is expected to generate 1.14 times more return on investment than HALSTEAD JAMES. However, Delta Air is 1.14 times more volatile than HALSTEAD JAMES LS 05. It trades about 0.24 of its potential returns per unit of risk. HALSTEAD JAMES LS 05 is currently generating about 0.12 per unit of risk. If you would invest  4,013  in Delta Air Lines on September 16, 2024 and sell it today you would earn a total of  1,857  from holding Delta Air Lines or generate 46.27% return on investment over 90 days.

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

Delta Air Lines  vs.  HALSTEAD JAMES LS 05

Delta Air Lines

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 18 (%) 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.

HALSTEAD JAMES LS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HALSTEAD JAMES LS 05 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, HALSTEAD JAMES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delta Air and HALSTEAD JAMES

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

The idea behind Delta Air Lines and HALSTEAD JAMES LS 05 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.