Correlation Between Delta Air and Transportadora
Can any of the company-specific risk be diversified away by investing in both Delta Air and Transportadora 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 Transportadora 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 Transportadora de Gas, you can compare the effects of market volatilities on Delta Air and Transportadora 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 Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Transportadora.
Diversification Opportunities for Delta Air and Transportadora
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Delta and Transportadora is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas 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 Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of Delta Air i.e., Delta Air and Transportadora go up and down completely randomly.
Pair Corralation between Delta Air and Transportadora
Considering the 90-day investment horizon Delta Air is expected to generate 3.01 times less return on investment than Transportadora. But when comparing it to its historical volatility, Delta Air Lines is 2.61 times less risky than Transportadora. It trades about 0.1 of its potential returns per unit of risk. Transportadora de Gas is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,534 in Transportadora de Gas on January 29, 2024 and sell it today you would earn a total of 147.00 from holding Transportadora de Gas or generate 9.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Delta Air Lines vs. Transportadora de Gas
Performance |
Timeline |
Delta Air Lines |
Transportadora de Gas |
Delta Air and Transportadora Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Delta Air and Transportadora
The main advantage of trading using opposite Delta Air and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.Delta Air vs. American Airlines Group | Delta Air vs. Southwest Airlines | Delta Air vs. JetBlue Airways Corp | Delta Air vs. Spirit Airlines |
Transportadora vs. Petroleo Brasileiro Petrobras | Transportadora vs. Ecopetrol SA ADR | Transportadora vs. Petrleo Brasileiro SA | Transportadora vs. Equinor ASA ADR |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
CEOs Directory Screen CEOs from public companies around the world | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |