Pair Correlation Between Ford Motor and American Airlines

This module allows you to analyze existing cross correlation between Ford Motor Company and American Airlines Group Inc. You can compare the effects of market volatilities on Ford Motor 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 Ford Motor with a short position of American Airlines. See also your portfolio center. Please also check ongoing floating volatility patterns of Ford Motor and American Airlines.
 Time Horizon     30 Days    Login   to change
Symbolsvs
 Ford Motor Company  vs   American Airlines Group Inc
 Performance (%) 
      Timeline 

Pair Volatility

Taking into account the 30 trading days horizon, Ford Motor Company is expected to under-perform the American Airlines. In addition to that, Ford Motor is 1.07 times more volatile than American Airlines Group Inc. It trades about -0.12 of its total potential returns per unit of risk. American Airlines Group Inc is currently generating about 0.33 per unit of volatility. If you would invest  5,259  in American Airlines Group Inc on December 22, 2017 and sell it today you would earn a total of  547  from holding American Airlines Group Inc or generate 10.4% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between Ford Motor and American Airlines
-0.2

Parameters

Time Period1 Month [change]
DirectionNegative 
StrengthInsignificant
Accuracy94.74%
ValuesDaily Returns

Diversification

Good diversification

Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor Company 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 Ford Motor 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 Ford Motor Company 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 Ford Motor i.e. Ford Motor and American Airlines go up and down completely randomly.

Comparative Volatility

 Predicted Return Density 
      Returns 

Ford Motor

  
0 

Risk-Adjusted Performance

Over the last 30 days Ford Motor Company has generated negative risk-adjusted returns adding no value to investors with long positions.

American Airlines Group

  
21 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in American Airlines Group Inc are ranked lower than 21 (%) of all global equities and portfolios over the last 30 days.