Correlation Between American Airlines and Ispire Technology
Can any of the company-specific risk be diversified away by investing in both American Airlines and Ispire Technology 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 Ispire Technology 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 Ispire Technology Common, you can compare the effects of market volatilities on American Airlines and Ispire Technology 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 Ispire Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Ispire Technology.
Diversification Opportunities for American Airlines and Ispire Technology
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Ispire is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Ispire Technology Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ispire Technology Common 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 Ispire Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ispire Technology Common has no effect on the direction of American Airlines i.e., American Airlines and Ispire Technology go up and down completely randomly.
Pair Corralation between American Airlines and Ispire Technology
Considering the 90-day investment horizon American Airlines Group is expected to generate 1.09 times more return on investment than Ispire Technology. However, American Airlines is 1.09 times more volatile than Ispire Technology Common. It trades about 0.01 of its potential returns per unit of risk. Ispire Technology Common is currently generating about -0.1 per unit of risk. If you would invest 1,697 in American Airlines Group on November 4, 2024 and sell it today you would lose (5.00) from holding American Airlines Group or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Airlines Group vs. Ispire Technology Common
Performance |
| Timeline |
| American Airlines |
| Ispire Technology Common |
American Airlines and Ispire Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Ispire Technology
The main advantage of trading using opposite American Airlines and Ispire Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Ispire Technology 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 Ispire Technology will offset losses from the drop in Ispire Technology'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 |
| Ispire Technology vs. Scandinavian Tobacco Group | Ispire Technology vs. Turning Point Brands | Ispire Technology vs. Japan Tobacco ADR | Ispire Technology vs. Zijin Mining Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Transaction History View history of all your transactions and understand their impact on performance |