Correlation Between American Airlines and Rainier Pacific
Can any of the company-specific risk be diversified away by investing in both American Airlines and Rainier Pacific 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 Rainier Pacific 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 Rainier Pacific Financial, you can compare the effects of market volatilities on American Airlines and Rainier Pacific 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 Rainier Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Rainier Pacific.
Diversification Opportunities for American Airlines and Rainier Pacific
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Rainier is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Rainier Pacific Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rainier Pacific Financial 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 Rainier Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rainier Pacific Financial has no effect on the direction of American Airlines i.e., American Airlines and Rainier Pacific go up and down completely randomly.
Pair Corralation between American Airlines and Rainier Pacific
If you would invest 1,299 in American Airlines Group on September 5, 2024 and sell it today you would earn a total of 189.00 from holding American Airlines Group or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
American Airlines Group vs. Rainier Pacific Financial
Performance |
| Timeline |
| American Airlines |
| Rainier Pacific Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Airlines and Rainier Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Rainier Pacific
The main advantage of trading using opposite American Airlines and Rainier Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Rainier Pacific 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 Rainier Pacific will offset losses from the drop in Rainier Pacific's long position.The idea behind American Airlines Group and Rainier Pacific Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Rainier Pacific vs. Bill Com Holdings | Rainier Pacific vs. Kaltura | Rainier Pacific vs. Aegean Airlines SA | Rainier Pacific vs. American Airlines 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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