Correlation Between SERI INDUSTRIAL and American Airlines
Can any of the company-specific risk be diversified away by investing in both SERI INDUSTRIAL 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 SERI INDUSTRIAL and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SERI INDUSTRIAL EO and American Airlines Group, you can compare the effects of market volatilities on SERI INDUSTRIAL 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 SERI INDUSTRIAL with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERI INDUSTRIAL and American Airlines.
Diversification Opportunities for SERI INDUSTRIAL and American Airlines
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SERI and American is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and SERI INDUSTRIAL 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 SERI INDUSTRIAL EO 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 SERI INDUSTRIAL i.e., SERI INDUSTRIAL and American Airlines go up and down completely randomly.
Pair Corralation between SERI INDUSTRIAL and American Airlines
Assuming the 90 days trading horizon SERI INDUSTRIAL is expected to generate 2.57 times less return on investment than American Airlines. In addition to that, SERI INDUSTRIAL is 1.9 times more volatile than American Airlines Group. It trades about 0.05 of its total potential returns per unit of risk. American Airlines Group is currently generating about 0.24 per unit of volatility. If you would invest 1,232 in American Airlines Group on September 1, 2024 and sell it today you would earn a total of 194.00 from holding American Airlines Group or generate 15.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SERI INDUSTRIAL EO vs. American Airlines Group
Performance |
| Timeline |
| SERI INDUSTRIAL EO |
| American Airlines |
SERI INDUSTRIAL and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SERI INDUSTRIAL and American Airlines
The main advantage of trading using opposite SERI INDUSTRIAL and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL 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.| SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc |
| American Airlines vs. SERI INDUSTRIAL EO | American Airlines vs. GRIFFIN MINING LTD | American Airlines vs. Lion One Metals | American Airlines vs. Western Copper and |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |