Correlation Between Yaacobi Brothers and American Airlines
Can any of the company-specific risk be diversified away by investing in both Yaacobi Brothers 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 Yaacobi Brothers and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yaacobi Brothers Group and American Airlines Group, you can compare the effects of market volatilities on Yaacobi Brothers 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 Yaacobi Brothers with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yaacobi Brothers and American Airlines.
Diversification Opportunities for Yaacobi Brothers and American Airlines
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yaacobi and American is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Yaacobi Brothers 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 Yaacobi Brothers 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 Yaacobi Brothers 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 Yaacobi Brothers i.e., Yaacobi Brothers and American Airlines go up and down completely randomly.
Pair Corralation between Yaacobi Brothers and American Airlines
Assuming the 90 days trading horizon Yaacobi Brothers Group is expected to under-perform the American Airlines. In addition to that, Yaacobi Brothers is 1.18 times more volatile than American Airlines Group. It trades about -0.12 of its total potential returns per unit of risk. American Airlines Group is currently generating about -0.03 per unit of volatility. If you would invest 1,492 in American Airlines Group on January 24, 2024 and sell it today you would lose (39.00) from holding American Airlines Group or give up 2.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Yaacobi Brothers Group vs. American Airlines Group
Performance |
| Timeline |
| Yaacobi Brothers |
| American Airlines |
Yaacobi Brothers and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yaacobi Brothers and American Airlines
The main advantage of trading using opposite Yaacobi Brothers and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yaacobi Brothers 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.| Yaacobi Brothers vs. Al Bad Massuot Yitzhak | Yaacobi Brothers vs. Gan Shmuel | Yaacobi Brothers vs. Analyst IMS Investment |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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