Correlation Between American Airlines and Clearside Biomedical
Can any of the company-specific risk be diversified away by investing in both American Airlines and Clearside Biomedical 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 Clearside Biomedical 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 Clearside Biomedical, you can compare the effects of market volatilities on American Airlines and Clearside Biomedical 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 Clearside Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Clearside Biomedical.
Diversification Opportunities for American Airlines and Clearside Biomedical
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Clearside is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Clearside Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearside Biomedical 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 Clearside Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearside Biomedical has no effect on the direction of American Airlines i.e., American Airlines and Clearside Biomedical go up and down completely randomly.
Pair Corralation between American Airlines and Clearside Biomedical
Assuming the 90 days horizon American Airlines Group is expected to generate 2.78 times more return on investment than Clearside Biomedical. However, American Airlines is 2.78 times more volatile than Clearside Biomedical. It trades about 0.14 of its potential returns per unit of risk. Clearside Biomedical is currently generating about -0.05 per unit of risk. If you would invest 1,358 in American Airlines Group on September 19, 2024 and sell it today you would earn a total of 180.00 from holding American Airlines Group or generate 13.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Airlines Group vs. Clearside Biomedical
Performance |
| Timeline |
| American Airlines |
| Clearside Biomedical |
American Airlines and Clearside Biomedical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Clearside Biomedical
The main advantage of trading using opposite American Airlines and Clearside Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Clearside Biomedical 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 Clearside Biomedical will offset losses from the drop in Clearside Biomedical's long position.| American Airlines vs. United Insurance Holdings | American Airlines vs. Direct Line Insurance | American Airlines vs. Luckin Coffee | American Airlines vs. ON SEMICONDUCTOR |
| Clearside Biomedical vs. Aegean Airlines SA | Clearside Biomedical vs. NURAN WIRELESS INC | Clearside Biomedical vs. American Airlines Group | Clearside Biomedical vs. AAC TECHNOLOGHLDGADR |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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