Correlation Between American Airlines and Citigroup
Can any of the company-specific risk be diversified away by investing in both American Airlines and Citigroup 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 American Airlines and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Airlines Group and Citigroup, you can compare the effects of market volatilities on American Airlines and Citigroup 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 American Airlines with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Citigroup.
Diversification Opportunities for American Airlines and Citigroup
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Citigroup is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and American Airlines 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 American Airlines Group are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of American Airlines i.e., American Airlines and Citigroup go up and down completely randomly.
Pair Corralation between American Airlines and Citigroup
Considering the 90-day investment horizon American Airlines Group is expected to under-perform the Citigroup. In addition to that, American Airlines is 1.52 times more volatile than Citigroup. It trades about 0.0 of its total potential returns per unit of risk. Citigroup is currently generating about 0.04 per unit of volatility. If you would invest 4,784 in Citigroup on January 26, 2024 and sell it today you would earn a total of 1,463 from holding Citigroup or generate 30.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
American Airlines Group vs. Citigroup
Performance |
Timeline |
American Airlines |
Citigroup |
American Airlines and Citigroup Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Airlines and Citigroup
The main advantage of trading using opposite American Airlines and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Airlines position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.American Airlines vs. Delta Air Lines | American Airlines vs. Southwest Airlines | American Airlines vs. JetBlue Airways Corp | American Airlines vs. Spirit Airlines |
Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Positions Ratings 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 | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |