Correlation Between American Airlines and Micro Imaging
Can any of the company-specific risk be diversified away by investing in both American Airlines and Micro Imaging 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 Micro Imaging 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 Micro Imaging Technology, you can compare the effects of market volatilities on American Airlines and Micro Imaging 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 Micro Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Micro Imaging.
Diversification Opportunities for American Airlines and Micro Imaging
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Micro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Micro Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Imaging Technology 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 Micro Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Imaging Technology has no effect on the direction of American Airlines i.e., American Airlines and Micro Imaging go up and down completely randomly.
Pair Corralation between American Airlines and Micro Imaging
If you would invest 1,401 in American Airlines Group on September 14, 2024 and sell it today you would earn a total of 323.00 from holding American Airlines Group or generate 23.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Airlines Group vs. Micro Imaging Technology
Performance |
| Timeline |
| American Airlines |
| Micro Imaging Technology |
American Airlines and Micro Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Micro Imaging
The main advantage of trading using opposite American Airlines and Micro Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Micro Imaging 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 Micro Imaging will offset losses from the drop in Micro Imaging's long position.| American Airlines vs. Southwest Airlines | 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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