Correlation Between Fair Isaac and American Airlines
Can any of the company-specific risk be diversified away by investing in both Fair Isaac 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 Fair Isaac and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fair Isaac and American Airlines Group, you can compare the effects of market volatilities on Fair Isaac 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 Fair Isaac with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fair Isaac and American Airlines.
Diversification Opportunities for Fair Isaac and American Airlines
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fair and American is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Fair Isaac and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Fair Isaac 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 Fair Isaac 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 Fair Isaac i.e., Fair Isaac and American Airlines go up and down completely randomly.
Pair Corralation between Fair Isaac and American Airlines
Assuming the 90 days trading horizon Fair Isaac is expected to generate 1.98 times less return on investment than American Airlines. But when comparing it to its historical volatility, Fair Isaac is 1.49 times less risky than American Airlines. It trades about 0.14 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5,964 in American Airlines Group on October 18, 2024 and sell it today you would earn a total of 4,875 from holding American Airlines Group or generate 81.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fair Isaac vs. American Airlines Group
Performance |
| Timeline |
| Fair Isaac |
| American Airlines |
Fair Isaac and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fair Isaac and American Airlines
The main advantage of trading using opposite Fair Isaac and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fair Isaac 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.| Fair Isaac vs. Spotify Technology SA | Fair Isaac vs. TechnipFMC plc | Fair Isaac vs. Agilent Technologies | Fair Isaac vs. Technos SA |
| American Airlines vs. Marfrig Global Foods | American Airlines vs. Take Two Interactive Software | American Airlines vs. Spotify Technology SA | American Airlines vs. Fair Isaac |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |