Correlation Between American Airlines and YATRA ONLINE
Can any of the company-specific risk be diversified away by investing in both American Airlines and YATRA ONLINE 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 YATRA ONLINE 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 YATRA ONLINE DL 0001, you can compare the effects of market volatilities on American Airlines and YATRA ONLINE 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 YATRA ONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and YATRA ONLINE.
Diversification Opportunities for American Airlines and YATRA ONLINE
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and YATRA is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and YATRA ONLINE DL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YATRA ONLINE DL 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 YATRA ONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YATRA ONLINE DL has no effect on the direction of American Airlines i.e., American Airlines and YATRA ONLINE go up and down completely randomly.
Pair Corralation between American Airlines and YATRA ONLINE
Assuming the 90 days horizon American Airlines Group is expected to generate 1.5 times more return on investment than YATRA ONLINE. However, American Airlines is 1.5 times more volatile than YATRA ONLINE DL 0001. It trades about 0.17 of its potential returns per unit of risk. YATRA ONLINE DL 0001 is currently generating about 0.17 per unit of risk. If you would invest 1,225 in American Airlines Group on September 4, 2024 and sell it today you would earn a total of 134.00 from holding American Airlines Group or generate 10.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Airlines Group vs. YATRA ONLINE DL 0001
Performance |
| Timeline |
| American Airlines |
| YATRA ONLINE DL |
American Airlines and YATRA ONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and YATRA ONLINE
The main advantage of trading using opposite American Airlines and YATRA ONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, YATRA ONLINE 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 YATRA ONLINE will offset losses from the drop in YATRA ONLINE's long position.| American Airlines vs. Delta Air Lines | American Airlines vs. AIR CHINA LTD | American Airlines vs. RYANAIR HLDGS ADR | American Airlines vs. Southwest Airlines Co |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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