Correlation Analysis Between Alcoa and American Airlines

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
Symbolsvs
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Comparative Performance

Alcoa  
0

Risk-Adjusted Performance

Over the last 30 days Alcoa Corporation has generated negative risk-adjusted returns adding no value to investors with long positions.
American Airlines  
3

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in American Airlines Group are ranked lower than 3 (%) of all global equities and portfolios over the last 30 days.

Alcoa and American Airlines Volatility Contrast

 Predicted Return Density 
      Returns 

Alcoa Corp.  vs.  American Airlines Group Inc

 Performance (%) 
      Timeline 

Pair Volatility

Allowing for the 30-days total investment horizon, Alcoa Corporation is expected to under-perform the American Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Alcoa Corporation is 1.0 times less risky than American Airlines. The stock trades about -0.21 of its potential returns per unit of risk. The American Airlines Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,204  in American Airlines Group on November 18, 2018 and sell it today you would earn a total of  127.00  from holding American Airlines Group or generate 3.96% return on investment over 30 days.

Pair Corralation between Alcoa and American Airlines

-0.09
Time Period2 Months [change]
DirectionNegative 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for Alcoa and American Airlines

Alcoa Corp. diversification synergy

Good 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.

Thematic Opportunities

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See also your portfolio center. Please also try Chance of Distress module to get analysis of equity chance of financial distress in the next 2 years.


 
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