Correlation Between DELTA AIR and AGNC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both DELTA AIR and AGNC INVESTMENT 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 AGNC INVESTMENT 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 AGNC INVESTMENT, you can compare the effects of market volatilities on DELTA AIR and AGNC INVESTMENT 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 AGNC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of DELTA AIR and AGNC INVESTMENT.
Diversification Opportunities for DELTA AIR and AGNC INVESTMENT
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between DELTA and AGNC is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding DELTA AIR LINES and AGNC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC INVESTMENT 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 AGNC INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGNC INVESTMENT has no effect on the direction of DELTA AIR i.e., DELTA AIR and AGNC INVESTMENT go up and down completely randomly.
Pair Corralation between DELTA AIR and AGNC INVESTMENT
Assuming the 90 days trading horizon DELTA AIR LINES is expected to generate 1.97 times more return on investment than AGNC INVESTMENT. However, DELTA AIR is 1.97 times more volatile than AGNC INVESTMENT. It trades about 0.17 of its potential returns per unit of risk. AGNC INVESTMENT is currently generating about 0.02 per unit of risk. If you would invest 5,086 in DELTA AIR LINES on October 21, 2024 and sell it today you would earn a total of 1,334 from holding DELTA AIR LINES or generate 26.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
DELTA AIR LINES vs. AGNC INVESTMENT
Performance |
Timeline |
DELTA AIR LINES |
AGNC INVESTMENT |
DELTA AIR and AGNC INVESTMENT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DELTA AIR and AGNC INVESTMENT
The main advantage of trading using opposite DELTA AIR and AGNC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DELTA AIR position performs unexpectedly, AGNC INVESTMENT 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 AGNC INVESTMENT will offset losses from the drop in AGNC INVESTMENT's long position.DELTA AIR vs. PULSION Medical Systems | ||
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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