Correlation Between International Consolidated and LATAM Airlines
Can any of the company-specific risk be diversified away by investing in both International Consolidated and LATAM 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 International Consolidated and LATAM Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and LATAM Airlines Group, you can compare the effects of market volatilities on International Consolidated and LATAM 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 Consolidated with a short position of LATAM Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and LATAM Airlines.
Diversification Opportunities for International Consolidated and LATAM Airlines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between International and LATAM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air and LATAM Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LATAM Airlines Group and International Consolidated 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 Consolidated Airlines are associated (or correlated) with LATAM Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LATAM Airlines Group has no effect on the direction of International Consolidated i.e., International Consolidated and LATAM Airlines go up and down completely randomly.
Pair Corralation between International Consolidated and LATAM Airlines
If you would invest 345.00 in International Consolidated Airlines on January 25, 2024 and sell it today you would earn a total of 87.00 from holding International Consolidated Airlines or generate 25.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
International Consolidated Air vs. LATAM Airlines Group
Performance |
| Timeline |
| International Consolidated |
| LATAM Airlines Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
International Consolidated and LATAM Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and LATAM Airlines
The main advantage of trading using opposite International Consolidated and LATAM Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated position performs unexpectedly, LATAM 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 LATAM Airlines will offset losses from the drop in LATAM Airlines' long position.The idea behind International Consolidated Airlines and LATAM 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.
| LATAM Airlines vs. Zoom Video Communications | LATAM Airlines vs. Transportadora de Gas | LATAM Airlines vs. BioNTech SE | LATAM Airlines vs. Radcom |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |