Correlation Between GREENX METALS and American Airlines
Can any of the company-specific risk be diversified away by investing in both GREENX METALS and American Airlines 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 GREENX METALS and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GREENX METALS LTD and American Airlines Group, you can compare the effects of market volatilities on GREENX METALS and American Airlines 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 GREENX METALS with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and American Airlines.
Diversification Opportunities for GREENX METALS and American Airlines
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GREENX and American is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and GREENX METALS 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 GREENX METALS LTD are associated (or correlated) with American Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Airlines has no effect on the direction of GREENX METALS i.e., GREENX METALS and American Airlines go up and down completely randomly.
Pair Corralation between GREENX METALS and American Airlines
Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 1.86 times more return on investment than American Airlines. However, GREENX METALS is 1.86 times more volatile than American Airlines Group. It trades about 0.02 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.02 per unit of risk. If you would invest 49.00 in GREENX METALS LTD on October 13, 2024 and sell it today you would lose (6.00) from holding GREENX METALS LTD or give up 12.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
GREENX METALS LTD vs. American Airlines Group
Performance |
| Timeline |
| GREENX METALS LTD |
| American Airlines |
GREENX METALS and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and American Airlines
The main advantage of trading using opposite GREENX METALS and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS position performs unexpectedly, American Airlines 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 American Airlines will offset losses from the drop in American Airlines' long position.| GREENX METALS vs. ZURICH INSURANCE GROUP | GREENX METALS vs. Molina Healthcare | GREENX METALS vs. Zurich Insurance Group | GREENX METALS vs. EPSILON HEALTHCARE LTD |
| American Airlines vs. AIR PRODCHEMICALS | American Airlines vs. National Beverage Corp | American Airlines vs. GREENX METALS LTD | American Airlines vs. Jacquet Metal Service |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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