Correlation Between Richtech Robotics and Delta Air

Can any of the company-specific risk be diversified away by investing in both Richtech Robotics and Delta Air 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 Richtech Robotics and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Richtech Robotics Class and Delta Air Lines, you can compare the effects of market volatilities on Richtech Robotics and Delta Air 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 Richtech Robotics with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richtech Robotics and Delta Air.

Diversification Opportunities for Richtech Robotics and Delta Air

0.47

Correlation Coefficient

Richtech Robotics  Delta Air

Very weak diversification

The 3 months correlation between Richtech and Delta is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Richtech Robotics Class and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines and Richtech Robotics 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 Richtech Robotics Class are associated (or correlated) with Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Richtech Robotics i.e., Richtech Robotics and Delta Air go up and down completely randomly.

Pair Corralation between Richtech Robotics and Delta Air

Allowing for the 90-day total investment horizon Richtech Robotics Class is expected to generate 4.8 times more return on investment than Delta Air. However, Richtech Robotics is 4.8 times more volatile than Delta Air Lines. It trades about 0.01 of its potential returns per unit of risk. Delta Air Lines is currently generating about -0.14 per unit of risk. If you would invest  349.00  in Richtech Robotics Class on December 28, 2024 and sell it today you would lose (130.00) from holding Richtech Robotics Class or give up 37.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Richtech Robotics Class  vs.  Delta Air Lines

Richtech Robotics Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Richtech Robotics Class has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Richtech Robotics is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

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. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Richtech Robotics and Delta Air

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

The idea behind Richtech Robotics Class and Delta Air Lines 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.