Correlation Between American Airlines and Kerry Logistics
Can any of the company-specific risk be diversified away by investing in both American Airlines and Kerry Logistics 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 Kerry Logistics 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 Kerry Logistics Network, you can compare the effects of market volatilities on American Airlines and Kerry Logistics 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 Kerry Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Kerry Logistics.
Diversification Opportunities for American Airlines and Kerry Logistics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Kerry is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Kerry Logistics Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerry Logistics Network 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 Kerry Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerry Logistics Network has no effect on the direction of American Airlines i.e., American Airlines and Kerry Logistics go up and down completely randomly.
Pair Corralation between American Airlines and Kerry Logistics
Considering the 90-day investment horizon American Airlines Group is expected to generate 0.54 times more return on investment than Kerry Logistics. However, American Airlines Group is 1.84 times less risky than Kerry Logistics. It trades about 0.04 of its potential returns per unit of risk. Kerry Logistics Network is currently generating about -0.03 per unit of risk. If you would invest 1,253 in American Airlines Group on September 14, 2024 and sell it today you would earn a total of 471.00 from holding American Airlines Group or generate 37.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.98% |
| Values | Daily Returns |
American Airlines Group vs. Kerry Logistics Network
Performance |
| Timeline |
| American Airlines |
| Kerry Logistics Network |
American Airlines and Kerry Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Kerry Logistics
The main advantage of trading using opposite American Airlines and Kerry Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Kerry Logistics 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 Kerry Logistics will offset losses from the drop in Kerry Logistics' long position.| American Airlines vs. Southwest Airlines | American Airlines vs. United Airlines Holdings | American Airlines vs. Frontier Group Holdings |
| Kerry Logistics vs. Copa Holdings SA | Kerry Logistics vs. United Airlines Holdings | Kerry Logistics vs. Delta Air Lines | Kerry Logistics vs. SkyWest |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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