Correlation Between United Continental and Delta Air

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

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

Diversification Opportunities for United Continental and Delta Air

0.98
  Correlation Coefficient
United Continental
Delta Air Lines

Almost no diversification

The 3 months correlation between United and Delta is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding United Continental Holdings In 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 United Continental 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 United Continental Holdings 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 United Continental i.e. United Continental and Delta Air go up and down completely randomly.

Pair Corralation between United Continental and Delta Air

Considering the 30-days investment horizon, United Continental Holdings is expected to generate 1.46 times more return on investment than Delta Air. However, United Continental is 1.46 times more volatile than Delta Air Lines. It trades about 0.11 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.09 per unit of risk. If you would invest  2,402  in United Continental Holdings on June 3, 2020 and sell it today you would earn a total of  1,012  from holding United Continental Holdings or generate 42.13% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

United Continental Holdings In  vs.  Delta Air Lines Inc

 Performance (%) 
      Timeline 
United Continental 
77

United Continental Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in United Continental Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 30 days. Even with considerably weak technical indicators, United Continental revealed solid returns over the last few months and may actually be approaching a breakup point.
Delta Air Lines 
66

Delta Air Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 6 (%) of all global equities and portfolios over the last 30 days. Even with considerably weak technical indicators, Delta Air revealed solid returns over the last few months and may actually be approaching a breakup point.

United Continental and Delta Air Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.


 
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