Correlation Between American Airlines and Schneider National
Can any of the company-specific risk be diversified away by investing in both American Airlines and Schneider National 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 Schneider National 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 Schneider National, you can compare the effects of market volatilities on American Airlines and Schneider National 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 Schneider National. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Schneider National.
Diversification Opportunities for American Airlines and Schneider National
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Schneider is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Schneider National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider National 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 Schneider National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schneider National has no effect on the direction of American Airlines i.e., American Airlines and Schneider National go up and down completely randomly.
Pair Corralation between American Airlines and Schneider National
Considering the 90-day investment horizon American Airlines Group is expected to under-perform the Schneider National. In addition to that, American Airlines is 1.82 times more volatile than Schneider National. It trades about -0.01 of its total potential returns per unit of risk. Schneider National is currently generating about 0.01 per unit of volatility. If you would invest 2,232 in Schneider National on January 20, 2025 and sell it today you would earn a total of 16.00 from holding Schneider National or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Airlines Group vs. Schneider National
Performance |
| Timeline |
| American Airlines |
| Schneider National |
American Airlines and Schneider National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Schneider National
The main advantage of trading using opposite American Airlines and Schneider National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Schneider National 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 Schneider National will offset losses from the drop in Schneider National'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 |
| Schneider National vs. Marten Transport | Schneider National vs. Heartland Express | Schneider National vs. Universal Logistics Holdings | Schneider National vs. Covenant Logistics 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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