Correlation Between China Eastern and Delta Air
Can any of the company-specific risk be diversified away by investing in both China Eastern 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 China Eastern and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Eastern Airlines and Delta Air Lines, you can compare the effects of market volatilities on China Eastern 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 China Eastern with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Eastern and Delta Air.
Diversification Opportunities for China Eastern and Delta Air
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Delta is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines 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 China Eastern 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 China Eastern Airlines 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 China Eastern i.e., China Eastern and Delta Air go up and down completely randomly.
Pair Corralation between China Eastern and Delta Air
If you would invest 4,665 in Delta Air Lines on February 14, 2024 and sell it today you would earn a total of 634.00 from holding Delta Air Lines or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
China Eastern Airlines vs. Delta Air Lines
Performance |
| Timeline |
| China Eastern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Delta Air Lines |
China Eastern and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Eastern and Delta Air
The main advantage of trading using opposite China Eastern and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Eastern 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.| China Eastern vs. KNOT Offshore Partners | China Eastern vs. SBM Offshore NV | China Eastern vs. Asbury Automotive Group | China Eastern vs. SunOpta |
| Delta Air vs. American Airlines Group | Delta Air vs. Southwest Airlines | Delta Air vs. JetBlue Airways Corp | Delta Air vs. Spirit Airlines |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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