Correlation Between American Airlines and 00108WAF7
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By analyzing existing cross correlation between American Airlines Group and AEP TEX INC, you can compare the effects of market volatilities on American Airlines and 00108WAF7 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 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and 00108WAF7.
Diversification Opportunities for American Airlines and 00108WAF7
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and 00108WAF7 is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and AEP TEX INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEP TEX INC 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 00108WAF7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEP TEX INC has no effect on the direction of American Airlines i.e., American Airlines and 00108WAF7 go up and down completely randomly.
Pair Corralation between American Airlines and 00108WAF7
Considering the 90-day investment horizon American Airlines is expected to generate 1.28 times less return on investment than 00108WAF7. But when comparing it to its historical volatility, American Airlines Group is 2.1 times less risky than 00108WAF7. It trades about 0.2 of its potential returns per unit of risk. AEP TEX INC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7,190 in AEP TEX INC on October 26, 2024 and sell it today you would earn a total of 478.00 from holding AEP TEX INC or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 77.78% |
| Values | Daily Returns |
American Airlines Group vs. AEP TEX INC
Performance |
| Timeline |
| American Airlines |
| AEP TEX INC |
American Airlines and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and 00108WAF7
The main advantage of trading using opposite American Airlines and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, 00108WAF7 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 00108WAF7 will offset losses from the drop in 00108WAF7's long position.| American Airlines vs. Delta Air Lines | American Airlines vs. Southwest Airlines | American Airlines vs. JetBlue Airways Corp | American Airlines vs. United Airlines 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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