Correlation Between China Eastern and Delta Air

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

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

Diversification Opportunities for China Eastern and Delta Air

0.33
  Correlation Coefficient
China Eastern Airlines
Delta Air Lines

Weak diversification

The 3 months correlation between China and Delta is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines Corpora and Delta Air Lines Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines and China Eastern 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 China Eastern Airlines 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 China Eastern i.e. China Eastern and Delta Air go up and down completely randomly.

Pair Corralation between China Eastern and Delta Air

Considering the 30-days investment horizon, China Eastern is expected to generate 2.09 times less return on investment than Delta Air. But when comparing it to its historical volatility, China Eastern Airlines is 1.74 times less risky than Delta Air. It trades about 0.07 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,323  in Delta Air Lines on June 7, 2020 and sell it today you would earn a total of  521.00  from holding Delta Air Lines or generate 22.43% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

China Eastern Airlines Corpora  vs.  Delta Air Lines Inc

 Performance (%) 
      Timeline 
China Eastern Airlines 
44

China Eastern Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in China Eastern Airlines are ranked lower than 4 (%) of all global equities and portfolios over the last 30 days. Despite somewhat sluggish basic indicators, China Eastern sustained solid returns over the last few months and may actually be approaching a breakup point.
Delta Air Lines 
55

Delta Air Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 5 (%) of all global equities and portfolios over the last 30 days. Even with considerably sluggish technical indicators, Delta Air revealed solid returns over the last few months and may actually be approaching a breakup point.

China Eastern and Delta Air Volatility Contrast

 Predicted Return Density 
      Returns 
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