Correlation Between American Airlines and Scottish Mortgage
Can any of the company-specific risk be diversified away by investing in both American Airlines and Scottish Mortgage 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 American Airlines and Scottish Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Airlines Group and Scottish Mortgage Investment, you can compare the effects of market volatilities on American Airlines and Scottish Mortgage 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 American Airlines with a short position of Scottish Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Scottish Mortgage.
Diversification Opportunities for American Airlines and Scottish Mortgage
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Scottish is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Scottish Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottish Mortgage and American Airlines 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 American Airlines Group are associated (or correlated) with Scottish Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottish Mortgage has no effect on the direction of American Airlines i.e., American Airlines and Scottish Mortgage go up and down completely randomly.
Pair Corralation between American Airlines and Scottish Mortgage
Assuming the 90 days horizon American Airlines is expected to generate 1.28 times less return on investment than Scottish Mortgage. In addition to that, American Airlines is 1.69 times more volatile than Scottish Mortgage Investment. It trades about 0.03 of its total potential returns per unit of risk. Scottish Mortgage Investment is currently generating about 0.05 per unit of volatility. If you would invest 831.00 in Scottish Mortgage Investment on October 14, 2024 and sell it today you would earn a total of 352.00 from holding Scottish Mortgage Investment or generate 42.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Airlines Group vs. Scottish Mortgage Investment
Performance |
| Timeline |
| American Airlines |
| Scottish Mortgage |
American Airlines and Scottish Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Scottish Mortgage
The main advantage of trading using opposite American Airlines and Scottish Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Scottish Mortgage 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 Scottish Mortgage will offset losses from the drop in Scottish Mortgage's long position.| American Airlines vs. Scottish Mortgage Investment | American Airlines vs. BRIT AMER TOBACCO | American Airlines vs. ECHO INVESTMENT ZY | American Airlines vs. MEDCAW INVESTMENTS LS 01 |
| Scottish Mortgage vs. CARSALESCOM | Scottish Mortgage vs. SINGAPORE AIRLINES | Scottish Mortgage vs. American Airlines Group | Scottish Mortgage vs. PLAYTECH |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |