Correlation Between Gol Linhas and Hawaiian Holdings
Can any of the company-specific risk be diversified away by investing in both Gol Linhas and Hawaiian Holdings 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 Gol Linhas and Hawaiian Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gol Linhas Aereas and Hawaiian Holdings, you can compare the effects of market volatilities on Gol Linhas and Hawaiian Holdings 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 Gol Linhas with a short position of Hawaiian Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gol Linhas and Hawaiian Holdings.
Diversification Opportunities for Gol Linhas and Hawaiian Holdings
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gol and Hawaiian is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gol Linhas Aereas and Hawaiian Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Holdings and Gol Linhas 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 Gol Linhas Aereas are associated (or correlated) with Hawaiian Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Holdings has no effect on the direction of Gol Linhas i.e., Gol Linhas and Hawaiian Holdings go up and down completely randomly.
Pair Corralation between Gol Linhas and Hawaiian Holdings
Considering the 90-day investment horizon Gol Linhas Aereas is expected to under-perform the Hawaiian Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Gol Linhas Aereas is 1.64 times less risky than Hawaiian Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Hawaiian Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,635 in Hawaiian Holdings on January 26, 2024 and sell it today you would lose (393.00) from holding Hawaiian Holdings or give up 24.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 88.69% |
| Values | Daily Returns |
Gol Linhas Aereas vs. Hawaiian Holdings
Performance |
| Timeline |
| Gol Linhas Aereas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hawaiian Holdings |
Gol Linhas and Hawaiian Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gol Linhas and Hawaiian Holdings
The main advantage of trading using opposite Gol Linhas and Hawaiian Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gol Linhas position performs unexpectedly, Hawaiian Holdings 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 Hawaiian Holdings will offset losses from the drop in Hawaiian Holdings' long position.| Gol Linhas vs. Azul SA | Gol Linhas vs. Air France KLM | Gol Linhas vs. Copa Holdings SA | Gol Linhas vs. International Consolidated Airlines |
| Hawaiian Holdings vs. Southwest Airlines | Hawaiian Holdings vs. JetBlue Airways Corp | Hawaiian Holdings vs. United Airlines Holdings | Hawaiian Holdings vs. Delta Air Lines |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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