Correlation Between Franklin Covey and Delta Air

Can any of the company-specific risk be diversified away by investing in both Franklin Covey 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 Franklin Covey and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Franklin Covey and Delta Air Lines, you can compare the effects of market volatilities on Franklin Covey 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 Franklin Covey with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Covey and Delta Air.

Diversification Opportunities for Franklin Covey and Delta Air

-0.39

Correlation Coefficient

Franklin Covey  Delta Air

Very good diversification

The 3 months correlation between Franklin and Delta is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Covey 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 Franklin Covey 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 Franklin Covey 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 Franklin Covey i.e., Franklin Covey and Delta Air go up and down completely randomly.

Pair Corralation between Franklin Covey and Delta Air

Allowing for the 90-day total investment horizon Franklin Covey is expected to generate 2.23 times less return on investment than Delta Air. In addition to that, Franklin Covey is 1.2 times more volatile than Delta Air Lines. It trades about 0.02 of its total potential returns per unit of risk. Delta Air Lines is currently generating about 0.04 per unit of volatility. If you would invest  3,648  in Delta Air Lines on January 30, 2024 and sell it today you would earn a total of  1,380  from holding Delta Air Lines or generate 37.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Franklin Covey  vs.  Delta Air Lines

Franklin Covey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Covey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Franklin Covey is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Delta Air Lines

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Delta Air disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Franklin Covey and Delta Air

The main advantage of trading using opposite Franklin Covey and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Covey 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.

The idea behind Franklin Covey and Delta Air Lines pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.