Correlation Between DELTA AIR and Allegheny Technologies
Can any of the company-specific risk be diversified away by investing in both DELTA AIR and Allegheny Technologies 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 Allegheny Technologies 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 Allegheny Technologies Incorporated, you can compare the effects of market volatilities on DELTA AIR and Allegheny Technologies 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 Allegheny Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of DELTA AIR and Allegheny Technologies.
Diversification Opportunities for DELTA AIR and Allegheny Technologies
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DELTA and Allegheny is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding DELTA AIR LINES and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies 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 Allegheny Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegheny Technologies has no effect on the direction of DELTA AIR i.e., DELTA AIR and Allegheny Technologies go up and down completely randomly.
Pair Corralation between DELTA AIR and Allegheny Technologies
Assuming the 90 days trading horizon DELTA AIR LINES is expected to under-perform the Allegheny Technologies. In addition to that, DELTA AIR is 1.43 times more volatile than Allegheny Technologies Incorporated. It trades about -0.05 of its total potential returns per unit of risk. Allegheny Technologies Incorporated is currently generating about -0.06 per unit of volatility. If you would invest 5,380 in Allegheny Technologies Incorporated on October 12, 2024 and sell it today you would lose (58.00) from holding Allegheny Technologies Incorporated or give up 1.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
DELTA AIR LINES vs. Allegheny Technologies Incorpo
Performance |
Timeline |
DELTA AIR LINES |
Allegheny Technologies |
DELTA AIR and Allegheny Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DELTA AIR and Allegheny Technologies
The main advantage of trading using opposite DELTA AIR and Allegheny Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DELTA AIR position performs unexpectedly, Allegheny Technologies 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 Allegheny Technologies will offset losses from the drop in Allegheny Technologies' long position.DELTA AIR vs. BII Railway Transportation | DELTA AIR vs. Rocket Internet SE | DELTA AIR vs. Lendlease Group | DELTA AIR vs. Sixt Leasing SE |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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