Correlation Between Fast Ejendom and American Airlines
Can any of the company-specific risk be diversified away by investing in both Fast Ejendom 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 Fast Ejendom and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Ejendom and American Airlines Group, you can compare the effects of market volatilities on Fast Ejendom 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 Fast Ejendom with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Ejendom and American Airlines.
Diversification Opportunities for Fast Ejendom and American Airlines
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fast and American is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fast Ejendom and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Fast Ejendom 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 Fast Ejendom 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 Fast Ejendom i.e., Fast Ejendom and American Airlines go up and down completely randomly.
Pair Corralation between Fast Ejendom and American Airlines
Assuming the 90 days trading horizon Fast Ejendom is expected to generate 0.77 times more return on investment than American Airlines. However, Fast Ejendom is 1.29 times less risky than American Airlines. It trades about 0.05 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.0 per unit of risk. If you would invest 11,100 in Fast Ejendom on February 6, 2024 and sell it today you would earn a total of 200.00 from holding Fast Ejendom or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Ejendom vs. American Airlines Group
Performance |
| Timeline |
| Fast Ejendom |
| American Airlines |
Fast Ejendom and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Ejendom and American Airlines
The main advantage of trading using opposite Fast Ejendom and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Ejendom 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.The idea behind Fast Ejendom and American Airlines Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |