Correlation Between Tedea Technological and American Airlines
Can any of the company-specific risk be diversified away by investing in both Tedea Technological 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 Tedea Technological and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tedea Technological Development and American Airlines Group, you can compare the effects of market volatilities on Tedea Technological 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 Tedea Technological with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tedea Technological and American Airlines.
Diversification Opportunities for Tedea Technological and American Airlines
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tedea and American is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Tedea Technological Developmen and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Tedea Technological 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 Tedea Technological Development 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 Tedea Technological i.e., Tedea Technological and American Airlines go up and down completely randomly.
Pair Corralation between Tedea Technological and American Airlines
Assuming the 90 days trading horizon Tedea Technological Development is expected to under-perform the American Airlines. In addition to that, Tedea Technological is 1.17 times more volatile than American Airlines Group. It trades about -0.03 of its total potential returns per unit of risk. American Airlines Group is currently generating about 0.02 per unit of volatility. If you would invest 1,350 in American Airlines Group on January 19, 2024 and sell it today you would earn a total of 73.00 from holding American Airlines Group or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 78.9% |
| Values | Daily Returns |
Tedea Technological Developmen vs. American Airlines Group
Performance |
| Timeline |
| Tedea Technological |
| American Airlines |
Tedea Technological and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tedea Technological and American Airlines
The main advantage of trading using opposite Tedea Technological and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tedea Technological 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.| Tedea Technological vs. Automatic Bank Services | Tedea Technological vs. EN Shoham Business | Tedea Technological vs. Rapac Communication Infrastructure | Tedea Technological vs. Tadiran Hldg |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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