Correlation Between Hartford Schroders and American Airlines
Can any of the company-specific risk be diversified away by investing in both Hartford Schroders 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 Hartford Schroders and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Schroders Emerging and American Airlines Group, you can compare the effects of market volatilities on Hartford Schroders 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 Hartford Schroders with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Schroders and American Airlines.
Diversification Opportunities for Hartford Schroders and American Airlines
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hartford and American is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Schroders Emerging and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Hartford Schroders 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 Hartford Schroders Emerging 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 Hartford Schroders i.e., Hartford Schroders and American Airlines go up and down completely randomly.
Pair Corralation between Hartford Schroders and American Airlines
Assuming the 90 days horizon Hartford Schroders Emerging is expected to generate 0.33 times more return on investment than American Airlines. However, Hartford Schroders Emerging is 3.06 times less risky than American Airlines. It trades about 0.07 of its potential returns per unit of risk. American Airlines Group is currently generating about -0.13 per unit of risk. If you would invest 1,566 in Hartford Schroders Emerging on January 17, 2024 and sell it today you would earn a total of 32.00 from holding Hartford Schroders Emerging or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Schroders Emerging vs. American Airlines Group
Performance |
| Timeline |
| Hartford Schroders |
| American Airlines |
Hartford Schroders and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Schroders and American Airlines
The main advantage of trading using opposite Hartford Schroders and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Schroders 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.| Hartford Schroders vs. Diamond Hill Large | Hartford Schroders vs. Edgewood Growth Fund | Hartford Schroders vs. Small Cap Equity | Hartford Schroders vs. Aquagold International |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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