Correlation Between LATAM Airlines and American Airlines
Can any of the company-specific risk be diversified away by investing in both LATAM Airlines 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 LATAM Airlines and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LATAM Airlines Group and American Airlines Group, you can compare the effects of market volatilities on LATAM Airlines 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 LATAM Airlines with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of LATAM Airlines and American Airlines.
Diversification Opportunities for LATAM Airlines and American Airlines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LATAM and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LATAM Airlines Group and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and LATAM Airlines 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 LATAM Airlines Group 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 LATAM Airlines i.e., LATAM Airlines and American Airlines go up and down completely randomly.
Pair Corralation between LATAM Airlines and American Airlines
If you would invest (100.00) in LATAM Airlines Group on January 20, 2024 and sell it today you would earn a total of 100.00 from holding LATAM Airlines Group or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
LATAM Airlines Group vs. American Airlines Group
Performance |
| Timeline |
| LATAM Airlines Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Airlines |
LATAM Airlines and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LATAM Airlines and American Airlines
The main advantage of trading using opposite LATAM Airlines and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LATAM Airlines 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.| LATAM Airlines vs. Village Super Market | LATAM Airlines vs. Morgan Stanley | LATAM Airlines vs. Papaya Growth Opportunity | LATAM Airlines vs. National Beverage Corp |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |