Correlation Between Hawaiian Holdings and Delta Air
Can any of the company-specific risk be diversified away by investing in both Hawaiian Holdings 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 Hawaiian Holdings and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Holdings and Delta Air Lines, you can compare the effects of market volatilities on Hawaiian Holdings 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 Hawaiian Holdings with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Holdings and Delta Air.
Diversification Opportunities for Hawaiian Holdings and Delta Air
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hawaiian and Delta is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Holdings 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 Hawaiian Holdings 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 Hawaiian Holdings 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 Hawaiian Holdings i.e., Hawaiian Holdings and Delta Air go up and down completely randomly.
Pair Corralation between Hawaiian Holdings and Delta Air
Allowing for the 90-day total investment horizon Hawaiian Holdings is expected to generate 4.45 times more return on investment than Delta Air. However, Hawaiian Holdings is 4.45 times more volatile than Delta Air Lines. It trades about 0.02 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.03 per unit of risk. If you would invest 1,702 in Hawaiian Holdings on January 25, 2024 and sell it today you would lose (477.00) from holding Hawaiian Holdings or give up 28.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawaiian Holdings vs. Delta Air Lines
Performance |
| Timeline |
| Hawaiian Holdings |
| Delta Air Lines |
Hawaiian Holdings and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Holdings and Delta Air
The main advantage of trading using opposite Hawaiian Holdings and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Holdings 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.| Hawaiian Holdings vs. Southwest Airlines | Hawaiian Holdings vs. JetBlue Airways Corp | Hawaiian Holdings vs. United Airlines Holdings | Hawaiian Holdings vs. Delta Air Lines |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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