Correlation Between Hawaiian Holdings and Gol Linhas
Can any of the company-specific risk be diversified away by investing in both Hawaiian Holdings and Gol Linhas 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 Hawaiian Holdings and Gol Linhas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Holdings and Gol Linhas Aereas, you can compare the effects of market volatilities on Hawaiian Holdings and Gol Linhas 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 Hawaiian Holdings with a short position of Gol Linhas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Holdings and Gol Linhas.
Diversification Opportunities for Hawaiian Holdings and Gol Linhas
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hawaiian and Gol is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Holdings and Gol Linhas Aereas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gol Linhas Aereas and Hawaiian Holdings 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 Hawaiian Holdings are associated (or correlated) with Gol Linhas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gol Linhas Aereas has no effect on the direction of Hawaiian Holdings i.e., Hawaiian Holdings and Gol Linhas go up and down completely randomly.
Pair Corralation between Hawaiian Holdings and Gol Linhas
Allowing for the 90-day total investment horizon Hawaiian Holdings is expected to generate 2.42 times more return on investment than Gol Linhas. However, Hawaiian Holdings is 2.42 times more volatile than Gol Linhas Aereas. It trades about 0.09 of its potential returns per unit of risk. Gol Linhas Aereas is currently generating about -0.14 per unit of risk. If you would invest 418.00 in Hawaiian Holdings on January 20, 2024 and sell it today you would earn a total of 877.00 from holding Hawaiian Holdings or generate 209.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 58.06% |
| Values | Daily Returns |
Hawaiian Holdings vs. Gol Linhas Aereas
Performance |
| Timeline |
| Hawaiian Holdings |
| Gol Linhas Aereas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hawaiian Holdings and Gol Linhas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Holdings and Gol Linhas
The main advantage of trading using opposite Hawaiian Holdings and Gol Linhas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Holdings position performs unexpectedly, Gol Linhas 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 Gol Linhas will offset losses from the drop in Gol Linhas' long position.| Hawaiian Holdings vs. Southwest Airlines | Hawaiian Holdings vs. JetBlue Airways Corp | Hawaiian Holdings vs. United Airlines Holdings | Hawaiian Holdings vs. Delta Air Lines |
| Gol Linhas vs. Azul SA | Gol Linhas vs. Air France KLM | Gol Linhas vs. Copa Holdings SA | Gol Linhas vs. International Consolidated 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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