Correlation Between Delta Air and KBC GR

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

Diversification Opportunities for Delta Air and KBC GR

0.58

Correlation Coefficient

Delta Air  KBC GR

Very weak diversification

The 3 months correlation between Delta and KBC is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and KBC GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC GR 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 KBC GR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC GR has no effect on the direction of Delta Air i.e., Delta Air and KBC GR go up and down completely randomly.

Pair Corralation between Delta Air and KBC GR

Assuming the 90 days horizon Delta Air Lines is expected to generate 1.89 times more return on investment than KBC GR. However, Delta Air is 1.89 times more volatile than KBC GR. It trades about 0.24 of its potential returns per unit of risk. KBC GR is currently generating about 0.1 per unit of risk. If you would invest  5,896  in Delta Air Lines on October 26, 2024 and sell it today you would earn a total of  720.00  from holding Delta Air Lines or generate 12.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Delta Air Lines  vs.  KBC GR

Delta Air Lines

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Delta Air reported solid returns over the last few months and may actually be approaching a breakup point.

KBC GR

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KBC GR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental drivers, KBC GR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delta Air and KBC GR

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

The idea behind Delta Air Lines and KBC GR 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.