Correlation Between American Airlines and ZINC MEDIA
Can any of the company-specific risk be diversified away by investing in both American Airlines and ZINC MEDIA 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 ZINC MEDIA 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 ZINC MEDIA GR, you can compare the effects of market volatilities on American Airlines and ZINC MEDIA 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 ZINC MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and ZINC MEDIA.
Diversification Opportunities for American Airlines and ZINC MEDIA
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and ZINC is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and ZINC MEDIA GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINC MEDIA GR 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 ZINC MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINC MEDIA GR has no effect on the direction of American Airlines i.e., American Airlines and ZINC MEDIA go up and down completely randomly.
Pair Corralation between American Airlines and ZINC MEDIA
Assuming the 90 days horizon American Airlines Group is expected to generate 1.26 times more return on investment than ZINC MEDIA. However, American Airlines is 1.26 times more volatile than ZINC MEDIA GR. It trades about 0.02 of its potential returns per unit of risk. ZINC MEDIA GR is currently generating about -0.03 per unit of risk. If you would invest 1,204 in American Airlines Group on December 12, 2024 and sell it today you would earn a total of 10.00 from holding American Airlines Group or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Airlines Group vs. ZINC MEDIA GR
Performance |
| Timeline |
| American Airlines |
| ZINC MEDIA GR |
American Airlines and ZINC MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and ZINC MEDIA
The main advantage of trading using opposite American Airlines and ZINC MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, ZINC MEDIA 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 ZINC MEDIA will offset losses from the drop in ZINC MEDIA's long position.| American Airlines vs. Southern Cross Media | ||
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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