Correlation Between NI Holdings and American Airlines
Can any of the company-specific risk be diversified away by investing in both NI Holdings 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 NI Holdings and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and American Airlines Group, you can compare the effects of market volatilities on NI Holdings 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 NI Holdings with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and American Airlines.
Diversification Opportunities for NI Holdings and American Airlines
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NODK and American is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and NI 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 NI Holdings 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 NI Holdings i.e., NI Holdings and American Airlines go up and down completely randomly.
Pair Corralation between NI Holdings and American Airlines
Given the investment horizon of 90 days NI Holdings is expected to generate 0.64 times more return on investment than American Airlines. However, NI Holdings is 1.56 times less risky than American Airlines. It trades about 0.06 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.02 per unit of risk. If you would invest 1,301 in NI Holdings on September 3, 2024 and sell it today you would earn a total of 278.00 from holding NI Holdings or generate 21.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NI Holdings vs. American Airlines Group
Performance |
| Timeline |
| NI Holdings |
| American Airlines |
NI Holdings and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and American Airlines
The main advantage of trading using opposite NI Holdings and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings 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.| NI Holdings vs. Horace Mann Educators | NI Holdings vs. Donegal Group A | NI Holdings vs. Global Indemnity PLC | NI Holdings vs. Selective Insurance Group |
| American Airlines vs. Delta Air Lines | American Airlines vs. Southwest Airlines | American Airlines vs. JetBlue Airways Corp | American Airlines vs. United Airlines 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |