Correlation Between American Airlines and National Health
Can any of the company-specific risk be diversified away by investing in both American Airlines and National Health 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 National Health 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 National Health Investors, you can compare the effects of market volatilities on American Airlines and National Health 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 National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and National Health.
Diversification Opportunities for American Airlines and National Health
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and National is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors 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 National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of American Airlines i.e., American Airlines and National Health go up and down completely randomly.
Pair Corralation between American Airlines and National Health
Assuming the 90 days horizon American Airlines Group is expected to under-perform the National Health. In addition to that, American Airlines is 1.16 times more volatile than National Health Investors. It trades about -0.38 of its total potential returns per unit of risk. National Health Investors is currently generating about 0.03 per unit of volatility. If you would invest 6,700 in National Health Investors on November 28, 2024 and sell it today you would earn a total of 50.00 from holding National Health Investors or generate 0.75% 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. National Health Investors
Performance |
| Timeline |
| American Airlines |
| National Health Investors |
American Airlines and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and National Health
The main advantage of trading using opposite American Airlines and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, National Health 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 National Health will offset losses from the drop in National Health's long position.| American Airlines vs. SMA Solar Technology | American Airlines vs. Computer And Technologies | American Airlines vs. Check Point Software | American Airlines vs. The Hanover Insurance |
| National Health vs. Salesforce | National Health vs. Cleanaway Waste Management | National Health vs. FLOW TRADERS LTD | National Health vs. GOME Retail Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |