Correlation Between Hf Foods and American Airlines
Can any of the company-specific risk be diversified away by investing in both Hf Foods 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 Hf Foods and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hf Foods Group and American Airlines Group, you can compare the effects of market volatilities on Hf Foods 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 Hf Foods with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hf Foods and American Airlines.
Diversification Opportunities for Hf Foods and American Airlines
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HFFG and American is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Hf Foods 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 Hf Foods Group 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 Hf Foods i.e., Hf Foods and American Airlines go up and down completely randomly.
Pair Corralation between Hf Foods and American Airlines
Given the investment horizon of 90 days Hf Foods Group is expected to under-perform the American Airlines. In addition to that, Hf Foods is 1.75 times more volatile than American Airlines Group. It trades about -0.58 of its total potential returns per unit of risk. American Airlines Group is currently generating about -0.46 per unit of volatility. If you would invest 1,690 in American Airlines Group on December 1, 2024 and sell it today you would lose (255.00) from holding American Airlines Group or give up 15.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hf Foods Group vs. American Airlines Group
Performance |
| Timeline |
| Hf Foods Group |
| American Airlines |
Hf Foods and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hf Foods and American Airlines
The main advantage of trading using opposite Hf Foods and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hf Foods 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.| Hf Foods vs. Innovative Food Hldg | Hf Foods vs. G Willi Food International | Hf Foods vs. Calavo Growers | Hf Foods vs. The Chefs Warehouse |
| American Airlines vs. Southwest Airlines | American Airlines vs. JetBlue Airways Corp | American Airlines vs. United Airlines Holdings | American Airlines 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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