Correlation Between Hawaiian Holdings and Air Transport
Can any of the company-specific risk be diversified away by investing in both Hawaiian Holdings and Air Transport 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 Hawaiian Holdings and Air Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Holdings and Air Transport Services, you can compare the effects of market volatilities on Hawaiian Holdings and Air Transport 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 Hawaiian Holdings with a short position of Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Holdings and Air Transport.
Diversification Opportunities for Hawaiian Holdings and Air Transport
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hawaiian and Air is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Holdings and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services and Hawaiian Holdings 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 Hawaiian Holdings are associated (or correlated) with Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of Hawaiian Holdings i.e., Hawaiian Holdings and Air Transport go up and down completely randomly.
Pair Corralation between Hawaiian Holdings and Air Transport
Allowing for the 90-day total investment horizon Hawaiian Holdings is expected to generate 3.0 times more return on investment than Air Transport. However, Hawaiian Holdings is 3.0 times more volatile than Air Transport Services. It trades about 0.03 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.0 per unit of risk. If you would invest 1,367 in Hawaiian Holdings on August 24, 2024 and sell it today you would earn a total of 433.00 from holding Hawaiian Holdings or generate 31.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.71% |
| Values | Daily Returns |
Hawaiian Holdings vs. Air Transport Services
Performance |
| Timeline |
| Hawaiian Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Air Transport Services |
Hawaiian Holdings and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Holdings and Air Transport
The main advantage of trading using opposite Hawaiian Holdings and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Holdings position performs unexpectedly, Air Transport 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 Air Transport will offset losses from the drop in Air Transport's long position.| Hawaiian Holdings vs. Southwest Airlines | Hawaiian Holdings vs. JetBlue Airways Corp | Hawaiian Holdings vs. United Airlines Holdings | Hawaiian Holdings vs. Delta Air Lines |
| Air Transport vs. Copa Holdings SA | Air Transport vs. SkyWest | Air Transport vs. Sun Country Airlines | Air Transport vs. Frontier Group Holdings |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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