This module allows you to analyze existing cross correlation between Alcoa Corporation and American Airlines Group. You can compare the effects of market volatilities on Alcoa 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 Alcoa with a short position of American Airlines. See also your portfolio center. Please also check ongoing floating volatility patterns of Alcoa and American Airlines.
|Horizon||30 Days Login to change|
Over the last 30 days Alcoa Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Over the last 30 days American Airlines Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical indicators remain considerably steady which may send shares a bit higher in November 2019. The new chaos may also be a sign of medium term up-swing for the business stakeholders.
Alcoa and American Airlines Volatility Contrast
Predicted Return Density
Alcoa Corp. vs. American Airlines Group Inc
Allowing for the 30-days total investment horizon, Alcoa Corporation is expected to generate 1.33 times more return on investment than American Airlines. However, Alcoa is 1.33 times more volatile than American Airlines Group. It trades about -0.05 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 2,356 in Alcoa Corporation on September 22, 2019 and sell it today you would lose (309.00) from holding Alcoa Corporation or give up 13.12% of portfolio value over 30 days.
Pair Corralation between Alcoa and American Airlines
|Time Period||3 Months [change]|
Diversification Opportunities for Alcoa and American Airlines
Very poor diversification
Overlapping area represents the amount of risk that can be diversified away by holding Alcoa Corp. 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 Alcoa 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 Alcoa Corporation 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 Alcoa i.e. Alcoa and American Airlines go up and down completely randomly.
See also your portfolio center. Please also try Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.