Correlation Between Delta Air and Pfizer
Can any of the company-specific risk be diversified away by investing in both Delta Air and Pfizer 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 Pfizer 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 Pfizer Inc, you can compare the effects of market volatilities on Delta Air and Pfizer 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 Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Pfizer.
Diversification Opportunities for Delta Air and Pfizer
Very good diversification
The 3 months correlation between Delta and Pfizer is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc 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 Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc has no effect on the direction of Delta Air i.e., Delta Air and Pfizer go up and down completely randomly.
Pair Corralation between Delta Air and Pfizer
Considering the 90-day investment horizon Delta Air Lines is expected to generate 1.99 times more return on investment than Pfizer. However, Delta Air is 1.99 times more volatile than Pfizer Inc. It trades about 0.16 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.5 per unit of risk. If you would invest 4,538 in Delta Air Lines on January 20, 2024 and sell it today you would earn a total of 247.00 from holding Delta Air Lines or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. Pfizer Inc
Performance |
| Timeline |
| Delta Air Lines |
| Pfizer Inc |
Delta Air and Pfizer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and Pfizer
The main advantage of trading using opposite Delta Air and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Pfizer 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 Pfizer will offset losses from the drop in Pfizer'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 |
| Pfizer vs. Alkermes Plc | Pfizer vs. Ironwood Pharmaceuticals | Pfizer vs. Deciphera Pharmaceuticals LLC | Pfizer vs. Eagle Pharmaceuticals |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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