Correlation Between Talgo SA and American Airlines
Can any of the company-specific risk be diversified away by investing in both Talgo SA 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 Talgo SA and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talgo SA and American Airlines Group, you can compare the effects of market volatilities on Talgo SA 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 Talgo SA with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talgo SA and American Airlines.
Diversification Opportunities for Talgo SA and American Airlines
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Talgo and American is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Talgo SA and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Talgo SA 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 Talgo SA 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 Talgo SA i.e., Talgo SA and American Airlines go up and down completely randomly.
Pair Corralation between Talgo SA and American Airlines
Assuming the 90 days trading horizon Talgo SA is expected to generate 1.03 times more return on investment than American Airlines. However, Talgo SA is 1.03 times more volatile than American Airlines Group. It trades about 0.07 of its potential returns per unit of risk. American Airlines Group is currently generating about -0.02 per unit of risk. If you would invest 432.00 in Talgo SA on December 29, 2023 and sell it today you would earn a total of 13.00 from holding Talgo SA or generate 3.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Talgo SA vs. American Airlines Group
Performance |
Timeline |
Talgo SA |
American Airlines |
Talgo SA and American Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Talgo SA and American Airlines
The main advantage of trading using opposite Talgo SA and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talgo SA 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.Talgo SA vs. Airbus Group SE | Talgo SA vs. Banco Bilbao Vizcaya | Talgo SA vs. Caixabank SA | Talgo SA vs. Cellnex Telecom SA |
American Airlines vs. Canadian Pacific Railway | American Airlines vs. Daseke Inc | American Airlines vs. Marten Transport | American Airlines vs. Werner Enterprises |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data |