Correlation Between American Airlines and Japan Asia
Can any of the company-specific risk be diversified away by investing in both American Airlines and Japan Asia 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 Japan Asia 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 Japan Asia Investment, you can compare the effects of market volatilities on American Airlines and Japan Asia 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 Japan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Japan Asia.
Diversification Opportunities for American Airlines and Japan Asia
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Japan is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Japan Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Asia Investment 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 Japan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Asia Investment has no effect on the direction of American Airlines i.e., American Airlines and Japan Asia go up and down completely randomly.
Pair Corralation between American Airlines and Japan Asia
Assuming the 90 days horizon American Airlines Group is expected to generate 2.28 times more return on investment than Japan Asia. However, American Airlines is 2.28 times more volatile than Japan Asia Investment. It trades about 0.23 of its potential returns per unit of risk. Japan Asia Investment is currently generating about -0.04 per unit of risk. If you would invest 994.00 in American Airlines Group on September 12, 2024 and sell it today you would earn a total of 640.00 from holding American Airlines Group or generate 64.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Airlines Group vs. Japan Asia Investment
Performance |
| Timeline |
| American Airlines |
| Japan Asia Investment |
American Airlines and Japan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Japan Asia
The main advantage of trading using opposite American Airlines and Japan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Japan Asia 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 Japan Asia will offset losses from the drop in Japan Asia's long position.| American Airlines vs. RYANAIR HLDGS ADR | American Airlines vs. Ryanair Holdings plc | American Airlines vs. Superior Plus Corp | American Airlines vs. SIVERS SEMICONDUCTORS AB |
| Japan Asia vs. Ameriprise Financial | Japan Asia vs. Ares Management Corp | Japan Asia vs. Superior Plus Corp | Japan Asia vs. SIVERS SEMICONDUCTORS AB |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |