Correlation Between Mead Johnson and American Airlines
Can any of the company-specific risk be diversified away by investing in both Mead Johnson 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 Mead Johnson and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mead Johnson Nutrition and American Airlines Group, you can compare the effects of market volatilities on Mead Johnson 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 Mead Johnson with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mead Johnson and American Airlines.
Diversification Opportunities for Mead Johnson and American Airlines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mead and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mead Johnson Nutrition and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Mead Johnson 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 Mead Johnson Nutrition 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 Mead Johnson i.e., Mead Johnson and American Airlines go up and down completely randomly.
Pair Corralation between Mead Johnson and American Airlines
If you would invest (100.00) in Mead Johnson Nutrition on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Mead Johnson Nutrition or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Mead Johnson Nutrition vs. American Airlines Group
Performance |
| Timeline |
| Mead Johnson Nutrition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Airlines |
Mead Johnson and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mead Johnson and American Airlines
The main advantage of trading using opposite Mead Johnson and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mead Johnson 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.| Mead Johnson vs. Beyond Inc | Mead Johnson vs. Cardinal Health | Mead Johnson vs. Logan Ridge Finance | Mead Johnson vs. Ameriprise Financial |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |