Correlation Between American Airlines and GENERAL
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By analyzing existing cross correlation between American Airlines Group and GENERAL ELEC CAP, you can compare the effects of market volatilities on American Airlines and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and GENERAL.
Diversification Opportunities for American Airlines and GENERAL
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and GENERAL is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and GENERAL ELEC CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL ELEC CAP 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL ELEC CAP has no effect on the direction of American Airlines i.e., American Airlines and GENERAL go up and down completely randomly.
Pair Corralation between American Airlines and GENERAL
Considering the 90-day investment horizon American Airlines Group is expected to generate 1.63 times more return on investment than GENERAL. However, American Airlines is 1.63 times more volatile than GENERAL ELEC CAP. It trades about 0.04 of its potential returns per unit of risk. GENERAL ELEC CAP is currently generating about 0.0 per unit of risk. If you would invest 1,253 in American Airlines Group on September 14, 2024 and sell it today you would earn a total of 471.00 from holding American Airlines Group or generate 37.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.2% |
| Values | Daily Returns |
American Airlines Group vs. GENERAL ELEC CAP
Performance |
| Timeline |
| American Airlines |
| GENERAL ELEC CAP |
American Airlines and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and GENERAL
The main advantage of trading using opposite American Airlines and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.| American Airlines vs. Southwest Airlines | American Airlines vs. United Airlines Holdings | American Airlines vs. Frontier Group Holdings |
| GENERAL vs. Anheuser Busch Inbev | GENERAL vs. FitLife Brands, Common | GENERAL vs. Where Food Comes | GENERAL vs. Compania Cervecerias Unidas |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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