Correlation Between Gol Linhas and Delta Air
Can any of the company-specific risk be diversified away by investing in both Gol Linhas 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 Gol Linhas and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gol Linhas Aereas and Delta Air Lines, you can compare the effects of market volatilities on Gol Linhas 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 Gol Linhas with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gol Linhas and Delta Air.
Diversification Opportunities for Gol Linhas and Delta Air
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gol and Delta is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Gol Linhas Aereas 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 Gol Linhas 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 Gol Linhas Aereas 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 Gol Linhas i.e., Gol Linhas and Delta Air go up and down completely randomly.
Pair Corralation between Gol Linhas and Delta Air
Considering the 90-day investment horizon Gol Linhas Aereas is expected to under-perform the Delta Air. In addition to that, Gol Linhas is 3.06 times more volatile than Delta Air Lines. It trades about -0.04 of its total potential returns per unit of risk. Delta Air Lines is currently generating about 0.09 per unit of volatility. If you would invest 3,287 in Delta Air Lines on January 20, 2024 and sell it today you would earn a total of 1,498 from holding Delta Air Lines or generate 45.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 79.44% |
| Values | Daily Returns |
Gol Linhas Aereas vs. Delta Air Lines
Performance |
| Timeline |
| Gol Linhas Aereas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Delta Air Lines |
Gol Linhas and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gol Linhas and Delta Air
The main advantage of trading using opposite Gol Linhas and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gol Linhas 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.| Gol Linhas vs. Azul SA | Gol Linhas vs. Air France KLM | Gol Linhas vs. Copa Holdings SA | Gol Linhas vs. International Consolidated Airlines |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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