American Airlines Information Ratio

American Airlines Group Inc -- USA Stock  

USD 47.39  0.29  0.61%

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American Airlines Group Inc has current Information Ratio of (0.25). The Information Ratio is the ratio of the alpha component of total returns to the standard deviation of these excess alpha returns. The alpha component is the return that is attributable to the manager skill to time the market and is the residual after taking out the risk free return and the beta components from the total returns. While the Sharpe ratio considers the standard deviation of the total returns, the information ratio considers the variability of only the alpha component of the return (which also forms the numerator). In other words, the information ratio is merely Jensen alpha divided by its standard deviation.
American Airlines 
INFOR 
 = 
ER[a] - ER[b] 
STD[a] 
 = 
(0.25)
ER[a] =   Expected return on investing in American Airlines
ER[b] =   Expected return on market index or selected benchmark
STD[a] =   Standard Deviation of returns on American Airlines

Information Ratio Comparison

American Airlines Group Inc is rated below average in information ratio category among related companies. It is rated third in maximum drawdown category among related companies .
The higher the information ratio, the greater the chances of the manager to make money in the future. The information ratio only looks to compute the return per unit of risk undertaken for the alpha component. This is important because alpha returns are risky, as they represent a zero sum game for the market as a whole. In fact, average alpha for the market as a whole is in practice slightly less than zero because of transaction and other costs. Therefore it is easy for a manager to take on ?alpha risk? and lose money that will bite into the beta returns.
Compare American Airlines to competition
American Airlines Group Inc., through its subsidiaries, operates in the airline industry. more
NameAmerican Airlines Group Inc
Analyst Consensus
Piotroski F Score
Macroaxis Advice
InstrumentUSA Stock Stocks Directory
RegionNorth America
ExchangeNASDAQ
CIK Number00006201.0
ISINUS02376R1023
CUSIP02376R102
Related EntityAMR
CurrencyUSD - US Dollar