Correlation Analysis Between Avianca Holdings and American Airlines

Analyzing existing cross correlation between Avianca Holdings S A and American Airlines Group. You can compare the effects of market volatilities on Avianca 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 Avianca Holdings with a short position of American Airlines. See also your portfolio center. Please also check ongoing floating volatility patterns of Avianca Holdings and American Airlines.
Horizon     30 Days    Login   to change
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Comparative Performance

Avianca Holdings S  
22

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Avianca Holdings S A are ranked lower than 2 (%) of all global equities and portfolios over the last 30 days. Despite nearly inconsistent fundamental indicators, Avianca Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2020.
American Airlines  
00

Risk-Adjusted Performance

Over the last 30 days American Airlines Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with considerably steady technical indicators, American Airlines is not utilizing all of its potentials. The prevailing stock price chaos, may contribute to medium term losses for the stakeholders.

Avianca Holdings and American Airlines Volatility Contrast

 Predicted Return Density 
    
  Returns 

Avianca Holdings S A  vs.  American Airlines Group Inc

 Performance (%) 
    
  Timeline 

Pair Volatility

Considering 30-days investment horizon, Avianca Holdings S A is expected to generate 1.47 times more return on investment than American Airlines. However, Avianca Holdings is 1.47 times more volatile than American Airlines Group. It trades about 0.04 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.0 per unit of risk. If you would invest  440.00  in Avianca Holdings S A on December 18, 2019 and sell it today you would earn a total of  20.00  from holding Avianca Holdings S A or generate 4.55% return on investment over 30 days.

Pair Corralation between Avianca Holdings and American Airlines

0.38
Time Period3 Months [change]
DirectionPositive 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Avianca Holdings and American Airlines

Avianca Holdings S A diversification synergy

Weak diversification

Overlapping area represents the amount of risk that can be diversified away by holding Avianca Holdings S A and American Airlines Group Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Avianca 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 Avianca Holdings S A 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 Avianca Holdings i.e. Avianca Holdings and American Airlines go up and down completely randomly.
See also your portfolio center. Please also try Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.