Correlation Between American Airlines and LATAM Airlines
Can any of the company-specific risk be diversified away by investing in both American Airlines and LATAM 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 American Airlines and LATAM Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Airlines Group and LATAM Airlines Group, you can compare the effects of market volatilities on American Airlines and LATAM 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 American Airlines with a short position of LATAM Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and LATAM Airlines.
Diversification Opportunities for American Airlines and LATAM Airlines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and LATAM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and LATAM Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LATAM Airlines Group 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 LATAM Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LATAM Airlines Group has no effect on the direction of American Airlines i.e., American Airlines and LATAM Airlines go up and down completely randomly.
Pair Corralation between American Airlines and LATAM Airlines
If you would invest 1,332 in American Airlines Group on January 17, 2024 and sell it today you would lose (38.00) from holding American Airlines Group or give up 2.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
American Airlines Group vs. LATAM Airlines Group
Performance |
| Timeline |
| American Airlines |
| LATAM Airlines Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Airlines and LATAM Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Airlines and LATAM Airlines
The main advantage of trading using opposite American Airlines and LATAM Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, LATAM 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 LATAM Airlines will offset losses from the drop in LATAM Airlines' long position.| American Airlines vs. Delta Air Lines | American Airlines vs. Southwest Airlines | American Airlines vs. JetBlue Airways Corp | American Airlines vs. Spirit Airlines |
| LATAM Airlines vs. Dave Busters Entertainment | LATAM Airlines vs. Vindicator Silver Lead Mining | LATAM Airlines vs. Paysafe | LATAM Airlines vs. Zhihu Inc ADR |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |