Correlation Between American Airlines and Plano Plano
Can any of the company-specific risk be diversified away by investing in both American Airlines and Plano Plano 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 Plano Plano 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 Plano Plano Desenvolvimento, you can compare the effects of market volatilities on American Airlines and Plano Plano 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 Plano Plano. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Plano Plano.
Diversification Opportunities for American Airlines and Plano Plano
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Plano is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Plano Plano Desenvolvimento in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plano Plano Desenvol 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 Plano Plano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plano Plano Desenvol has no effect on the direction of American Airlines i.e., American Airlines and Plano Plano go up and down completely randomly.
Pair Corralation between American Airlines and Plano Plano
Assuming the 90 days trading horizon American Airlines Group is expected to under-perform the Plano Plano. But the stock apears to be less risky and, when comparing its historical volatility, American Airlines Group is 1.63 times less risky than Plano Plano. The stock trades about -0.08 of its potential returns per unit of risk. The Plano Plano Desenvolvimento is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 828.00 in Plano Plano Desenvolvimento on November 3, 2024 and sell it today you would earn a total of 160.00 from holding Plano Plano Desenvolvimento or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Airlines Group vs. Plano Plano Desenvolvimento
Performance |
| Timeline |
| American Airlines |
| Plano Plano Desenvol |
American Airlines and Plano Plano Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and Plano Plano
The main advantage of trading using opposite American Airlines and Plano Plano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Plano Plano 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 Plano Plano will offset losses from the drop in Plano Plano's long position.| American Airlines vs. Apartment Investment and | American Airlines vs. Deutsche Bank Aktiengesellschaft | American Airlines vs. Multilaser Industrial SA | American Airlines vs. Nordon Indstrias Metalrgicas |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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