Correlation Between 488401AD2 and American Airlines
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By analyzing existing cross correlation between KMPR 38 23 FEB 32 and American Airlines Group, you can compare the effects of market volatilities on 488401AD2 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 488401AD2 with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of 488401AD2 and American Airlines.
Diversification Opportunities for 488401AD2 and American Airlines
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 488401AD2 and American is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding KMPR 38 23 FEB 32 and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and 488401AD2 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 KMPR 38 23 FEB 32 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 488401AD2 i.e., 488401AD2 and American Airlines go up and down completely randomly.
Pair Corralation between 488401AD2 and American Airlines
Assuming the 90 days trading horizon KMPR 38 23 FEB 32 is expected to under-perform the American Airlines. But the bond apears to be less risky and, when comparing its historical volatility, KMPR 38 23 FEB 32 is 1.54 times less risky than American Airlines. The bond trades about -0.11 of its potential returns per unit of risk. The American Airlines Group is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,187 in American Airlines Group on September 13, 2024 and sell it today you would earn a total of 557.50 from holding American Airlines Group or generate 46.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 62.79% |
| Values | Daily Returns |
KMPR 38 23 FEB 32 vs. American Airlines Group
Performance |
| Timeline |
| KMPR 38 23 |
| American Airlines |
488401AD2 and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 488401AD2 and American Airlines
The main advantage of trading using opposite 488401AD2 and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 488401AD2 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.| 488401AD2 vs. Alaska Air Group | 488401AD2 vs. Finnair Oyj | 488401AD2 vs. Summit Materials | 488401AD2 vs. Air Lease |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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