Correlation Between Delta Air and Transport International

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Can any of the company-specific risk be diversified away by investing in both Delta Air and Transport International 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 Transport International 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 Transport International Holdings, you can compare the effects of market volatilities on Delta Air and Transport International 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 Transport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and Transport International.

Diversification Opportunities for Delta Air and Transport International

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Delta and Transport is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Transport International Holdin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport International 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 Transport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport International has no effect on the direction of Delta Air i.e., Delta Air and Transport International go up and down completely randomly.

Pair Corralation between Delta Air and Transport International

Assuming the 90 days horizon Delta Air Lines is expected to generate 0.95 times more return on investment than Transport International. However, Delta Air Lines is 1.05 times less risky than Transport International. It trades about 0.15 of its potential returns per unit of risk. Transport International Holdings is currently generating about 0.05 per unit of risk. If you would invest  3,671  in Delta Air Lines on April 23, 2025 and sell it today you would earn a total of  1,171  from holding Delta Air Lines or generate 31.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Delta Air Lines  vs.  Transport International Holdin

 Performance 
       Timeline  
Delta Air Lines 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Delta Air reported solid returns over the last few months and may actually be approaching a breakup point.
Transport International 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Transport International Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Transport International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Delta Air and Transport International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Delta Air and Transport International

The main advantage of trading using opposite Delta Air and Transport International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Transport International 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 Transport International will offset losses from the drop in Transport International's long position.
The idea behind Delta Air Lines and Transport International Holdings 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.
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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