Correlation Between American Airlines and BANK MANDIRI
Can any of the company-specific risk be diversified away by investing in both American Airlines and BANK MANDIRI 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 BANK MANDIRI 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 BANK MANDIRI, you can compare the effects of market volatilities on American Airlines and BANK MANDIRI 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 BANK MANDIRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and BANK MANDIRI.
Diversification Opportunities for American Airlines and BANK MANDIRI
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and BANK is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI 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 BANK MANDIRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK MANDIRI has no effect on the direction of American Airlines i.e., American Airlines and BANK MANDIRI go up and down completely randomly.
Pair Corralation between American Airlines and BANK MANDIRI
Assuming the 90 days horizon American Airlines is expected to generate 1.78 times less return on investment than BANK MANDIRI. But when comparing it to its historical volatility, American Airlines Group is 1.66 times less risky than BANK MANDIRI. It trades about 0.02 of its potential returns per unit of risk. BANK MANDIRI is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 28.00 in BANK MANDIRI on October 13, 2024 and sell it today you would earn a total of 2.00 from holding BANK MANDIRI or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Airlines Group vs. BANK MANDIRI
Performance |
| Timeline |
| American Airlines |
| BANK MANDIRI |
American Airlines and BANK MANDIRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and BANK MANDIRI
The main advantage of trading using opposite American Airlines and BANK MANDIRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, BANK MANDIRI 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 BANK MANDIRI will offset losses from the drop in BANK MANDIRI's long position.| American Airlines vs. AIR PRODCHEMICALS | American Airlines vs. National Beverage Corp | American Airlines vs. GREENX METALS LTD | American Airlines vs. Jacquet Metal Service |
| BANK MANDIRI vs. SQUIRREL MEDIA SA | BANK MANDIRI vs. American Airlines Group | BANK MANDIRI vs. Singapore Airlines Limited | BANK MANDIRI vs. International Consolidated Airlines |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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