Correlation Between DELTA AIR and MAG SILVER

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

Diversification Opportunities for DELTA AIR and MAG SILVER

0.29

Correlation Coefficient

DELTA AIR  MAG SILVER

Modest diversification

The 3 months correlation between DELTA and MAG is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding DELTA AIR LINES and MAG SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG SILVER 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 MAG SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG SILVER has no effect on the direction of DELTA AIR i.e., DELTA AIR and MAG SILVER go up and down completely randomly.

Pair Corralation between DELTA AIR and MAG SILVER

Assuming the 90 days trading horizon DELTA AIR LINES is expected to under-perform the MAG SILVER. In addition to that, DELTA AIR is 1.05 times more volatile than MAG SILVER. It trades about -0.18 of its total potential returns per unit of risk. MAG SILVER is currently generating about 0.08 per unit of volatility. If you would invest  1,342  in MAG SILVER on December 20, 2024 and sell it today you would earn a total of  144.00  from holding MAG SILVER or generate 10.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

DELTA AIR LINES  vs.  MAG SILVER

DELTA AIR LINES

Risk-Adjusted Performance

Very Weak

Over the last 90 days DELTA AIR LINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

MAG SILVER

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MAG SILVER are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, MAG SILVER unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DELTA AIR and MAG SILVER

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

The idea behind DELTA AIR LINES and MAG SILVER 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..