Correlation Between Delta Air and Avianca Holdings
Can any of the company-specific risk be diversified away by investing in both Delta Air and Avianca Holdings 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 Avianca Holdings 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 Avianca Holdings SA, you can compare the effects of market volatilities on Delta Air and Avianca Holdings 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 Avianca Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Avianca Holdings.
Diversification Opportunities for Delta Air and Avianca Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Delta and Avianca is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Avianca Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avianca Holdings 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 Avianca Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avianca Holdings has no effect on the direction of Delta Air i.e., Delta Air and Avianca Holdings go up and down completely randomly.
Pair Corralation between Delta Air and Avianca Holdings
If you would invest 3,183 in Delta Air Lines on January 26, 2024 and sell it today you would earn a total of 1,611 from holding Delta Air Lines or generate 50.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Delta Air Lines vs. Avianca Holdings SA
Performance |
| Timeline |
| Delta Air Lines |
| Avianca Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Delta Air and Avianca Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Avianca Holdings
The main advantage of trading using opposite Delta Air and Avianca Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Avianca Holdings 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 Avianca Holdings will offset losses from the drop in Avianca Holdings' long position.| Delta Air vs. American Airlines Group | Delta Air vs. Southwest Airlines | Delta Air vs. JetBlue Airways Corp | Delta Air vs. Spirit Airlines |
| Avianca Holdings vs. ScanSource | Avianca Holdings vs. Space Communication | Avianca Holdings vs. Asure Software | Avianca Holdings vs. Dave Busters Entertainment |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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