Correlation Between Inbar Group and American Airlines
Can any of the company-specific risk be diversified away by investing in both Inbar Group 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 Inbar Group and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inbar Group Finance and American Airlines Group, you can compare the effects of market volatilities on Inbar Group 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 Inbar Group with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inbar Group and American Airlines.
Diversification Opportunities for Inbar Group and American Airlines
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Inbar and American is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Inbar Group Finance and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Inbar Group 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 Inbar Group Finance 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 Inbar Group i.e., Inbar Group and American Airlines go up and down completely randomly.
Pair Corralation between Inbar Group and American Airlines
Assuming the 90 days trading horizon Inbar Group Finance is expected to generate 18.37 times more return on investment than American Airlines. However, Inbar Group is 18.37 times more volatile than American Airlines Group. It trades about 0.04 of its potential returns per unit of risk. American Airlines Group is currently generating about -0.01 per unit of risk. If you would invest 23,500 in Inbar Group Finance on January 25, 2024 and sell it today you would earn a total of 3,100 from holding Inbar Group Finance or generate 13.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 78.79% |
Values | Daily Returns |
Inbar Group Finance vs. American Airlines Group
Performance |
Timeline |
Inbar Group Finance |
American Airlines |
Inbar Group and American Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Inbar Group and American Airlines
The main advantage of trading using opposite Inbar Group and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inbar Group 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.Inbar Group vs. MediPress Health Limited Partnership | Inbar Group vs. IDI Insurance | Inbar Group vs. Seach Medical Group | Inbar Group vs. Blender Financial Technologies |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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