Correlation Analysis Between International Business and American Airlines

This module allows you to analyze existing cross correlation between International Business Machines and American Airlines Group. You can compare the effects of market volatilities on International Business 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 International Business with a short position of American Airlines. See also your portfolio center. Please also check ongoing floating volatility patterns of International Business and American Airlines.
Horizon     30 Days    Login   to change
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Comparative Performance

International Business  
00

Risk-Adjusted Performance

Over the last 30 days International Business Machines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with considerably steady technical indicators, International Business is not utilizing all of its potentials. The ongoing stock price chaos, may contribute to medium term losses for the stakeholders.
American Airlines  
00

Risk-Adjusted Performance

Over the last 30 days American Airlines Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with considerably steady technical indicators, American Airlines is not utilizing all of its potentials. The current stock price chaos, may contribute to medium term losses for the stakeholders.

International Business and American Airlines Volatility Contrast

 Predicted Return Density 
      Returns 

International Business Machine  vs.  American Airlines Group Inc

 Performance (%) 
      Timeline 

Pair Volatility

Considering 30-days investment horizon, International Business Machines is expected to under-perform the American Airlines. But the stock apears to be less risky and, when comparing its historical volatility, International Business Machines is 1.71 times less risky than American Airlines. The stock trades about -0.08 of its potential returns per unit of risk. The American Airlines Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,777  in American Airlines Group on November 13, 2019 and sell it today you would lose (29.00)  from holding American Airlines Group or give up 1.04% of portfolio value over 30 days.

Pair Corralation between International Business and American Airlines

-0.29
Time Period3 Months [change]
DirectionNegative 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Diversification Opportunities for International Business and American Airlines

International Business Machine diversification synergy

Very good diversification

Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and American Airlines Group Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and International Business 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 International Business Machines 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 International Business i.e. International Business and American Airlines go up and down completely randomly.
See also your portfolio center. Please also try Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.


 
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