Correlation Between Hashicorp and American Airlines
Can any of the company-specific risk be diversified away by investing in both Hashicorp 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 Hashicorp and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hashicorp and American Airlines Group, you can compare the effects of market volatilities on Hashicorp 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 Hashicorp with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hashicorp and American Airlines.
Diversification Opportunities for Hashicorp and American Airlines
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hashicorp and American is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hashicorp and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Hashicorp 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 Hashicorp 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 Hashicorp i.e., Hashicorp and American Airlines go up and down completely randomly.
Pair Corralation between Hashicorp and American Airlines
Considering the 90-day investment horizon Hashicorp is expected to generate 1.81 times more return on investment than American Airlines. However, Hashicorp is 1.81 times more volatile than American Airlines Group. It trades about 0.17 of its potential returns per unit of risk. American Airlines Group is currently generating about -0.11 per unit of risk. If you would invest 2,702 in Hashicorp on January 26, 2024 and sell it today you would earn a total of 439.00 from holding Hashicorp or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hashicorp vs. American Airlines Group
Performance |
| Timeline |
| Hashicorp |
| American Airlines |
Hashicorp and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hashicorp and American Airlines
The main advantage of trading using opposite Hashicorp and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hashicorp 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.The idea behind Hashicorp and American Airlines Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| American Airlines vs. Delta Air Lines | American Airlines vs. Southwest Airlines | American Airlines vs. JetBlue Airways Corp | American Airlines vs. Spirit Airlines |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |