Correlation Between DKIDKF and American Airlines
Can any of the company-specific risk be diversified away by investing in both DKIDKF 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 DKIDKF and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investeringsforeningen Danske Invest and American Airlines Group, you can compare the effects of market volatilities on DKIDKF 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 DKIDKF with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of DKIDKF and American Airlines.
Diversification Opportunities for DKIDKF and American Airlines
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DKIDKF and American is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Investeringsforeningen Danske and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and DKIDKF 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 Investeringsforeningen Danske Invest 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 DKIDKF i.e., DKIDKF and American Airlines go up and down completely randomly.
Pair Corralation between DKIDKF and American Airlines
Assuming the 90 days trading horizon DKIDKF is expected to generate 2.87 times less return on investment than American Airlines. But when comparing it to its historical volatility, Investeringsforeningen Danske Invest is 2.19 times less risky than American Airlines. It trades about 0.01 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,388 in American Airlines Group on January 25, 2024 and sell it today you would earn a total of 4.00 from holding American Airlines Group or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.34% |
| Values | Daily Returns |
Investeringsforeningen Danske vs. American Airlines Group
Performance |
| Timeline |
| Investeringsforeningen |
| American Airlines |
DKIDKF and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DKIDKF and American Airlines
The main advantage of trading using opposite DKIDKF and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DKIDKF 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.| DKIDKF vs. Jyske Invest Nye | DKIDKF vs. Jyske Invest Nye | DKIDKF vs. Jyske Invest Hjt | DKIDKF vs. Jyske Invest Lange |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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