Correlation Between Universal Technical and American Airlines

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Universal Technical 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 Universal Technical and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Technical Institute and American Airlines Group, you can compare the effects of market volatilities on Universal Technical 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 Universal Technical with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Technical and American Airlines.

Diversification Opportunities for Universal Technical and American Airlines

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between Universal and American is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Universal Technical Institute and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Universal Technical 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 Universal Technical Institute 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 Universal Technical i.e., Universal Technical and American Airlines go up and down completely randomly.

Pair Corralation between Universal Technical and American Airlines

Considering the 90-day investment horizon Universal Technical Institute is expected to generate 1.14 times more return on investment than American Airlines. However, Universal Technical is 1.14 times more volatile than American Airlines Group. It trades about 0.1 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  765.00  in Universal Technical Institute on December 29, 2023 and sell it today you would earn a total of  753.00  from holding Universal Technical Institute or generate 98.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Universal Technical Institute  vs.  American Airlines Group

 Performance 
       Timeline  
Universal Technical 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Universal Technical Institute are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Universal Technical demonstrated solid returns over the last few months and may actually be approaching a breakup point.
American Airlines 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in American Airlines Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, American Airlines disclosed solid returns over the last few months and may actually be approaching a breakup point.

Universal Technical and American Airlines Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Universal Technical and American Airlines

The main advantage of trading using opposite Universal Technical and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Technical 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.
The idea behind Universal Technical Institute and American 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.
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

Other Complementary Tools

Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Fundamental Analysis
View fundamental data based on most recent published financial statements
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Bonds Directory
Find actively traded corporate debentures issued by US companies
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Stocks Directory
Find actively traded stocks across global markets
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency