Correlation Between Delta Air and SCOTT TECHNOLOGY

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

Diversification Opportunities for Delta Air and SCOTT TECHNOLOGY

DeltaSCOTTDiversified AwayDeltaSCOTTDiversified Away100%
0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Delta and SCOTT is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of Delta Air i.e., Delta Air and SCOTT TECHNOLOGY go up and down completely randomly.

Pair Corralation between Delta Air and SCOTT TECHNOLOGY

Assuming the 90 days horizon Delta Air Lines is expected to generate 0.86 times more return on investment than SCOTT TECHNOLOGY. However, Delta Air Lines is 1.16 times less risky than SCOTT TECHNOLOGY. It trades about 0.16 of its potential returns per unit of risk. SCOTT TECHNOLOGY is currently generating about 0.12 per unit of risk. If you would invest  5,051  in Delta Air Lines on October 23, 2024 and sell it today you would earn a total of  1,319  from holding Delta Air Lines or generate 26.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Delta Air Lines  vs.  SCOTT TECHNOLOGY

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 0102030
JavaScript chart by amCharts 3.21.15OYC RZH
       Timeline  
Delta Air Lines 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
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 unfluctuating basic indicators, Delta Air reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan505254565860626466
SCOTT TECHNOLOGY 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SCOTT TECHNOLOGY are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, SCOTT TECHNOLOGY exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan11.051.11.151.21.251.31.35

Delta Air and SCOTT TECHNOLOGY Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.77-5.82-3.87-1.920.03252.14.246.378.51 0.020.030.040.050.06
JavaScript chart by amCharts 3.21.15OYC RZH
       Returns  

Pair Trading with Delta Air and SCOTT TECHNOLOGY

The main advantage of trading using opposite Delta Air and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY's long position.
The idea behind Delta Air Lines and SCOTT TECHNOLOGY 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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