Correlation Between American Airlines and Primoris Services
Can any of the company-specific risk be diversified away by investing in both American Airlines and Primoris Services 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 Primoris Services 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 Primoris Services, you can compare the effects of market volatilities on American Airlines and Primoris Services 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 Primoris Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Primoris Services.
Diversification Opportunities for American Airlines and Primoris Services
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and Primoris is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Primoris Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primoris Services 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 Primoris Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primoris Services has no effect on the direction of American Airlines i.e., American Airlines and Primoris Services go up and down completely randomly.
Pair Corralation between American Airlines and Primoris Services
Considering the 90-day investment horizon American Airlines Group is expected to under-perform the Primoris Services. But the stock apears to be less risky and, when comparing its historical volatility, American Airlines Group is 1.82 times less risky than Primoris Services. The stock trades about -0.19 of its potential returns per unit of risk. The Primoris Services is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 7,640 in Primoris Services on December 1, 2024 and sell it today you would lose (469.00) from holding Primoris Services or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Airlines Group vs. Primoris Services
Performance |
| Timeline |
| American Airlines |
| Primoris Services |
American Airlines and Primoris Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Primoris Services
The main advantage of trading using opposite American Airlines and Primoris Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Primoris Services 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 Primoris Services will offset losses from the drop in Primoris Services' 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 |
| Primoris Services vs. MYR Group | Primoris Services vs. Granite Construction Incorporated | Primoris Services vs. Matrix Service Co | Primoris Services vs. Api Group Corp |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |