Correlation Between ANTA SPORTS and American Airlines
Can any of the company-specific risk be diversified away by investing in both ANTA SPORTS and American Airlines 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 ANTA SPORTS and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANTA SPORTS PRODUCT and American Airlines Group, you can compare the effects of market volatilities on ANTA SPORTS and American Airlines 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 ANTA SPORTS with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANTA SPORTS and American Airlines.
Diversification Opportunities for ANTA SPORTS and American Airlines
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ANTA and American is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ANTA SPORTS PRODUCT and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and ANTA SPORTS 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 ANTA SPORTS PRODUCT are associated (or correlated) with American Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Airlines has no effect on the direction of ANTA SPORTS i.e., ANTA SPORTS and American Airlines go up and down completely randomly.
Pair Corralation between ANTA SPORTS and American Airlines
Assuming the 90 days trading horizon ANTA SPORTS PRODUCT is expected to generate 1.19 times more return on investment than American Airlines. However, ANTA SPORTS is 1.19 times more volatile than American Airlines Group. It trades about 0.06 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.02 per unit of risk. If you would invest 666.00 in ANTA SPORTS PRODUCT on September 3, 2024 and sell it today you would earn a total of 281.00 from holding ANTA SPORTS PRODUCT or generate 42.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANTA SPORTS PRODUCT vs. American Airlines Group
Performance |
| Timeline |
| ANTA SPORTS PRODUCT |
| American Airlines |
ANTA SPORTS and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANTA SPORTS and American Airlines
The main advantage of trading using opposite ANTA SPORTS and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANTA SPORTS position performs unexpectedly, American Airlines 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 American Airlines will offset losses from the drop in American Airlines' long position.| ANTA SPORTS vs. PRECISION DRILLING P | ANTA SPORTS vs. JD SPORTS FASH | ANTA SPORTS vs. Columbia Sportswear | ANTA SPORTS vs. The Hanover Insurance |
| American Airlines vs. Delta Air Lines | American Airlines vs. AIR CHINA LTD | American Airlines vs. RYANAIR HLDGS ADR | American Airlines vs. Southwest Airlines Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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