Correlation Between Delta Air and GMS
Can any of the company-specific risk be diversified away by investing in both Delta Air and GMS 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 GMS 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 GMS Inc, you can compare the effects of market volatilities on Delta Air and GMS 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 GMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Air and GMS.
Diversification Opportunities for Delta Air and GMS
Poor diversification
The 3 months correlation between Delta and GMS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS Inc 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 GMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMS Inc has no effect on the direction of Delta Air i.e., Delta Air and GMS go up and down completely randomly.
Pair Corralation between Delta Air and GMS
Considering the 90-day investment horizon Delta Air is expected to generate 1.6 times less return on investment than GMS. But when comparing it to its historical volatility, Delta Air Lines is 1.31 times less risky than GMS. It trades about 0.14 of its potential returns per unit of risk. GMS Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 7,660 in GMS Inc on May 26, 2025 and sell it today you would earn a total of 3,330 from holding GMS Inc or generate 43.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Air Lines vs. GMS Inc
Performance |
| Timeline |
| Delta Air Lines |
| GMS Inc |
Delta Air and GMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Air and GMS
The main advantage of trading using opposite Delta Air and GMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air position performs unexpectedly, GMS 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 GMS will offset losses from the drop in GMS's long position.| Delta Air vs. United Airlines Holdings | Delta Air vs. American Airlines Group | Delta Air vs. Southwest Airlines | Delta Air vs. JetBlue Airways Corp |
| GMS vs. Armstrong World Industries | GMS vs. Quanex Building Products | GMS vs. Jeld Wen Holding | GMS vs. Janus International Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |