Correlation Between American Airlines and SunPower
Can any of the company-specific risk be diversified away by investing in both American Airlines and SunPower 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 SunPower 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 SunPower, you can compare the effects of market volatilities on American Airlines and SunPower 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 SunPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and SunPower.
Diversification Opportunities for American Airlines and SunPower
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and SunPower is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and SunPower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunPower 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 SunPower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunPower has no effect on the direction of American Airlines i.e., American Airlines and SunPower go up and down completely randomly.
Pair Corralation between American Airlines and SunPower
If you would invest 1,700 in American Airlines Group on November 2, 2024 and sell it today you would lose (10.00) from holding American Airlines Group or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.0% |
| Values | Daily Returns |
American Airlines Group vs. SunPower
Performance |
| Timeline |
| American Airlines |
| SunPower |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Airlines and SunPower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and SunPower
The main advantage of trading using opposite American Airlines and SunPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, SunPower 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 SunPower will offset losses from the drop in SunPower'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 |
| SunPower vs. Enphase Energy | SunPower vs. First Solar | SunPower vs. Sunnova Energy International | SunPower vs. SolarEdge Technologies |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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