Correlation Between American Airlines and Interspeed
Can any of the company-specific risk be diversified away by investing in both American Airlines and Interspeed 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 Interspeed 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 Interspeed, you can compare the effects of market volatilities on American Airlines and Interspeed 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 Interspeed. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Interspeed.
Diversification Opportunities for American Airlines and Interspeed
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Interspeed is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Interspeed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interspeed 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 Interspeed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interspeed has no effect on the direction of American Airlines i.e., American Airlines and Interspeed go up and down completely randomly.
Pair Corralation between American Airlines and Interspeed
If you would invest 1,299 in American Airlines Group on September 4, 2024 and sell it today you would earn a total of 162.00 from holding American Airlines Group or generate 12.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
American Airlines Group vs. Interspeed
Performance |
| Timeline |
| American Airlines |
| Interspeed |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Airlines and Interspeed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Interspeed
The main advantage of trading using opposite American Airlines and Interspeed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Interspeed 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 Interspeed will offset losses from the drop in Interspeed's long position.| American Airlines vs. Delta Air Lines | American Airlines vs. United Airlines Holdings | American Airlines vs. Frontier Group Holdings |
| Interspeed vs. Constellation Brands Class | Interspeed vs. Porvair plc | Interspeed vs. Mesa Air Group | Interspeed vs. Diageo PLC ADR |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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