Correlation Between DELTA AIR and China Resources
Can any of the company-specific risk be diversified away by investing in both DELTA AIR and China Resources 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 China Resources 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 China Resources Gas, you can compare the effects of market volatilities on DELTA AIR and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of DELTA AIR and China Resources.
Diversification Opportunities for DELTA AIR and China Resources
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DELTA and China is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding DELTA AIR LINES and China Resources Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Gas 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Gas has no effect on the direction of DELTA AIR i.e., DELTA AIR and China Resources go up and down completely randomly.
Pair Corralation between DELTA AIR and China Resources
Assuming the 90 days trading horizon DELTA AIR LINES is expected to generate 0.98 times more return on investment than China Resources. However, DELTA AIR LINES is 1.02 times less risky than China Resources. It trades about 0.16 of its potential returns per unit of risk. China Resources Gas is currently generating about 0.0 per unit of risk. If you would invest 4,632 in DELTA AIR LINES on October 9, 2024 and sell it today you would earn a total of 1,086 from holding DELTA AIR LINES or generate 23.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.33% |
Values | Daily Returns |
DELTA AIR LINES vs. China Resources Gas
Performance |
Timeline |
DELTA AIR LINES |
China Resources Gas |
DELTA AIR and China Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DELTA AIR and China Resources
The main advantage of trading using opposite DELTA AIR and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DELTA AIR position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.DELTA AIR vs. SLR Investment Corp | DELTA AIR vs. CHRYSALIS INVESTMENTS LTD | DELTA AIR vs. ECHO INVESTMENT ZY | DELTA AIR vs. SALESFORCE INC CDR |
China Resources vs. FRACTAL GAMING GROUP | China Resources vs. Scientific Games | China Resources vs. GAMING FAC SA | China Resources vs. Information Services International Dentsu |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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