Correlation Between REVO INSURANCE and American Airlines
Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE 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 REVO INSURANCE and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and American Airlines Group, you can compare the effects of market volatilities on REVO INSURANCE 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 REVO INSURANCE with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and American Airlines.
Diversification Opportunities for REVO INSURANCE and American Airlines
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between REVO and American is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and REVO INSURANCE 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 REVO INSURANCE SPA 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 REVO INSURANCE i.e., REVO INSURANCE and American Airlines go up and down completely randomly.
Pair Corralation between REVO INSURANCE and American Airlines
Assuming the 90 days horizon REVO INSURANCE is expected to generate 1.73 times less return on investment than American Airlines. But when comparing it to its historical volatility, REVO INSURANCE SPA is 2.32 times less risky than American Airlines. It trades about 0.16 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,053 in American Airlines Group on September 22, 2024 and sell it today you would earn a total of 577.00 from holding American Airlines Group or generate 54.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
REVO INSURANCE SPA vs. American Airlines Group
Performance |
| Timeline |
| REVO INSURANCE SPA |
| American Airlines |
REVO INSURANCE and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REVO INSURANCE and American Airlines
The main advantage of trading using opposite REVO INSURANCE and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE 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.| REVO INSURANCE vs. The Travelers Companies | REVO INSURANCE vs. Atea ASA | REVO INSURANCE vs. ATHENE HOLDING PRFSERC | REVO INSURANCE vs. CLOUDFLARE INC A |
| American Airlines vs. Delta Air Lines | American Airlines vs. Air China Limited | American Airlines vs. AIR CHINA LTD | American Airlines vs. RYANAIR HLDGS ADR |
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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