Correlation Between American Airlines and Associated Banc-Corp
Can any of the company-specific risk be diversified away by investing in both American Airlines and Associated Banc-Corp 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 Associated Banc-Corp 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 Associated Banc Corp Depositary, you can compare the effects of market volatilities on American Airlines and Associated Banc-Corp 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 Associated Banc-Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Associated Banc-Corp.
Diversification Opportunities for American Airlines and Associated Banc-Corp
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Associated is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Associated Banc Corp Depositar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Banc Corp 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 Associated Banc-Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Banc Corp has no effect on the direction of American Airlines i.e., American Airlines and Associated Banc-Corp go up and down completely randomly.
Pair Corralation between American Airlines and Associated Banc-Corp
Considering the 90-day investment horizon American Airlines Group is expected to under-perform the Associated Banc-Corp. In addition to that, American Airlines is 2.18 times more volatile than Associated Banc Corp Depositary. It trades about -0.05 of its total potential returns per unit of risk. Associated Banc Corp Depositary is currently generating about -0.11 per unit of volatility. If you would invest 2,223 in Associated Banc Corp Depositary on November 7, 2024 and sell it today you would lose (70.00) from holding Associated Banc Corp Depositary or give up 3.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
American Airlines Group vs. Associated Banc Corp Depositar
Performance |
| Timeline |
| American Airlines |
| Associated Banc Corp |
American Airlines and Associated Banc-Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Associated Banc-Corp
The main advantage of trading using opposite American Airlines and Associated Banc-Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Associated Banc-Corp 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 Associated Banc-Corp will offset losses from the drop in Associated Banc-Corp's long position.| American Airlines vs. Southwest Airlines | American Airlines vs. JetBlue Airways Corp | American Airlines vs. United Airlines Holdings | American Airlines vs. Frontier Group Holdings |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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