Correlation Between BankInvest Optima and American Airlines
Can any of the company-specific risk be diversified away by investing in both BankInvest Optima 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 BankInvest Optima and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BankInvest Optima 55 and American Airlines Group, you can compare the effects of market volatilities on BankInvest Optima 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 BankInvest Optima with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankInvest Optima and American Airlines.
Diversification Opportunities for BankInvest Optima and American Airlines
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between BankInvest and American is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Optima 55 and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and BankInvest Optima 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 BankInvest Optima 55 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 BankInvest Optima i.e., BankInvest Optima and American Airlines go up and down completely randomly.
Pair Corralation between BankInvest Optima and American Airlines
Assuming the 90 days trading horizon BankInvest Optima 55 is expected to generate 0.15 times more return on investment than American Airlines. However, BankInvest Optima 55 is 6.57 times less risky than American Airlines. It trades about -0.21 of its potential returns per unit of risk. American Airlines Group is currently generating about -0.07 per unit of risk. If you would invest 20,200 in BankInvest Optima 55 on January 25, 2024 and sell it today you would lose (350.00) from holding BankInvest Optima 55 or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
BankInvest Optima 55 vs. American Airlines Group
Performance |
| Timeline |
| BankInvest Optima |
| American Airlines |
BankInvest Optima and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BankInvest Optima and American Airlines
The main advantage of trading using opposite BankInvest Optima and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BankInvest Optima 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.| BankInvest Optima vs. Novo Nordisk AS | BankInvest Optima vs. Nordea Bank Abp | BankInvest Optima vs. DSV Panalpina AS | BankInvest Optima vs. AP Mller |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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