Correlation Between Willy Food and American Airlines
Can any of the company-specific risk be diversified away by investing in both Willy Food 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 Willy Food and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willy Food and American Airlines Group, you can compare the effects of market volatilities on Willy Food 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 Willy Food with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willy Food and American Airlines.
Diversification Opportunities for Willy Food and American Airlines
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Willy and American is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Willy Food and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Willy Food 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 Willy Food 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 Willy Food i.e., Willy Food and American Airlines go up and down completely randomly.
Pair Corralation between Willy Food and American Airlines
Assuming the 90 days trading horizon Willy Food is expected to under-perform the American Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Willy Food is 1.15 times less risky than American Airlines. The stock trades about -0.22 of its potential returns per unit of risk. The American Airlines Group is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 1,411 in American Airlines Group on January 16, 2024 and sell it today you would lose (117.00) from holding American Airlines Group or give up 8.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Willy Food vs. American Airlines Group
Performance |
| Timeline |
| Willy Food |
| American Airlines |
Willy Food and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willy Food and American Airlines
The main advantage of trading using opposite Willy Food and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willy Food 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.| Willy Food vs. Rami Levi | Willy Food vs. Neto ME Holdings | Willy Food vs. Shufersal | Willy Food vs. Strauss Group |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |