Correlation Between Chuangs China and American Airlines
Can any of the company-specific risk be diversified away by investing in both Chuangs China 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 Chuangs China and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuangs China Investments and American Airlines Group, you can compare the effects of market volatilities on Chuangs China 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 Chuangs China with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and American Airlines.
Diversification Opportunities for Chuangs China and American Airlines
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and American is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Chuangs China 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 Chuangs China Investments 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 Chuangs China i.e., Chuangs China and American Airlines go up and down completely randomly.
Pair Corralation between Chuangs China and American Airlines
If you would invest 1,232 in American Airlines Group on September 1, 2024 and sell it today you would earn a total of 194.00 from holding American Airlines Group or generate 15.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. American Airlines Group
Performance |
| Timeline |
| Chuangs China Investments |
| American Airlines |
Chuangs China and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and American Airlines
The main advantage of trading using opposite Chuangs China and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China 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.| Chuangs China vs. ADRIATIC METALS LS 013355 | Chuangs China vs. Astral Foods Limited | Chuangs China vs. LION ONE METALS | Chuangs China vs. United Natural Foods |
| American Airlines vs. SERI INDUSTRIAL EO | American Airlines vs. GRIFFIN MINING LTD | American Airlines vs. Lion One Metals | American Airlines vs. Western Copper and |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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