Correlation Between Delta Air and Four Leaf

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

Diversification Opportunities for Delta Air and Four Leaf

0.59

Correlation Coefficient

Delta Air  Four Leaf

Very weak diversification

The 3 months correlation between Delta and Four is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and Four Leaf Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Leaf Acquisition 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 Four Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Leaf Acquisition has no effect on the direction of Delta Air i.e., Delta Air and Four Leaf go up and down completely randomly.

Pair Corralation between Delta Air and Four Leaf

Considering the 90-day investment horizon Delta Air Lines is expected to generate 3.64 times more return on investment than Four Leaf. However, Delta Air is 3.64 times more volatile than Four Leaf Acquisition. It trades about 0.1 of its potential returns per unit of risk. Four Leaf Acquisition is currently generating about 0.1 per unit of risk. If you would invest  5,101  in Delta Air Lines on May 17, 2025 and sell it today you would earn a total of  795.00  from holding Delta Air Lines or generate 15.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Delta Air Lines  vs.  Four Leaf Acquisition

Delta Air Lines

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Delta Air Lines are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Delta Air disclosed solid returns over the last few months and may actually be approaching a breakup point.

Four Leaf Acquisition

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Four Leaf Acquisition are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Four Leaf is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Delta Air and Four Leaf

The main advantage of trading using opposite Delta Air and Four Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, Four Leaf 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 Four Leaf will offset losses from the drop in Four Leaf's long position.

The idea behind Delta Air Lines and Four Leaf Acquisition 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.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.