Correlation Between LATAM Airlines and Delta Air
Can any of the company-specific risk be diversified away by investing in both LATAM Airlines 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 LATAM Airlines and Delta Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LATAM Airlines Group and Delta Air Lines, you can compare the effects of market volatilities on LATAM Airlines 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 LATAM Airlines with a short position of Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of LATAM Airlines and Delta Air.
Diversification Opportunities for LATAM Airlines and Delta Air
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LATAM and Delta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LATAM Airlines Group 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 LATAM Airlines 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 LATAM Airlines Group 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 LATAM Airlines i.e., LATAM Airlines and Delta Air go up and down completely randomly.
Pair Corralation between LATAM Airlines and Delta Air
If you would invest 3,387 in Delta Air Lines on January 17, 2024 and sell it today you would earn a total of 1,278 from holding Delta Air Lines or generate 37.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
LATAM Airlines Group vs. Delta Air Lines
Performance |
| Timeline |
| LATAM Airlines Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Delta Air Lines |
LATAM Airlines and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LATAM Airlines and Delta Air
The main advantage of trading using opposite LATAM Airlines and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LATAM Airlines 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.| LATAM Airlines vs. Dave Busters Entertainment | LATAM Airlines vs. Vindicator Silver Lead Mining | LATAM Airlines vs. Paysafe | LATAM Airlines vs. Zhihu Inc ADR |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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