This module allows you to analyze existing cross correlation between American Airlines Group and Alcoa Corporation. You can compare the effects of market volatilities on American Airlines and Alcoa 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 American Airlines with a short position of Alcoa. See also your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Alcoa.
|Horizon||30 Days Login to change|
Over the last 30 days American Airlines Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal 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.
Over the last 30 days Alcoa Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in November 2019. The current disturbance may also be a sign of long term up-swing for the company investors.
American Airlines and Alcoa Volatility Contrast
Predicted Return Density
American Airlines Group Inc vs. Alcoa Corp.
Considering 30-days investment horizon, American Airlines Group is expected to under-perform the Alcoa. But the stock apears to be less risky and, when comparing its historical volatility, American Airlines Group is 1.22 times less risky than Alcoa. The stock trades about -0.09 of its potential returns per unit of risk. The Alcoa Corporation is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 2,341 in Alcoa Corporation on September 16, 2019 and sell it today you would lose (351.00) from holding Alcoa Corporation or give up 14.99% of portfolio value over 30 days.
Pair Corralation between American Airlines and Alcoa
|Time Period||3 Months [change]|
Diversification Opportunities for American Airlines and Alcoa
Very poor diversification
Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group Inc and Alcoa Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Alcoa and American Airlines 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 American Airlines Group are associated (or correlated) with Alcoa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcoa has no effect on the direction of American Airlines i.e. American Airlines and Alcoa go up and down completely randomly.
See also your portfolio center. Please also try Price Transformation module to use price transformation models to analyze depth of different equity instruments across global markets.