This module allows you to analyze existing cross correlation between DOW and American Airlines Group. You can compare the effects of market volatilities on DOW 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 DOW with a short position of American Airlines. See also your portfolio center
. Please also check ongoing floating volatility patterns of DOW
and American Airlines
DOW vs. American Airlines Group Inc
Given the investment horizon of 30 days, DOW is expected to generate 0.27 times more return on investment than American Airlines. However, DOW is 3.67 times less risky than American Airlines. It trades about 0.02 of its potential returns per unit of risk. American Airlines Group is currently generating about -0.25 per unit of risk. If you would invest 2,498,747 in DOW on June 17, 2018 and sell it today you would earn a total of 7,689 from holding DOW or generate 0.31% return on investment over 30 days.
Pair Corralation between DOW and American Airlines
|Time Period||1 Month [change]|
Very weak diversification
Overlapping area represents the amount of risk that can be diversified away by holding DOW and American Airlines Group Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on American Airlines Group and DOW 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 DOW 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 Group has no effect on the direction of DOW i.e. DOW and American Airlines go up and down completely randomly.
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