Correlation Between Hawaiian Holdings and International Consolidated

Can any of the company-specific risk be diversified away by investing in both Hawaiian Holdings and International Consolidated 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 Hawaiian Holdings and International Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hawaiian Holdings and International Consolidated Airlines, you can compare the effects of market volatilities on Hawaiian Holdings and International Consolidated 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 Hawaiian Holdings with a short position of International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Holdings and International Consolidated.

Diversification Opportunities for Hawaiian Holdings and International Consolidated

0.0

Correlation Coefficient

Hawaiian Holdings  International Consolidated

Pay attention - limited upside

The 3 months correlation between Hawaiian and International is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Holdings and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated and Hawaiian Holdings 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 Hawaiian Holdings are associated (or correlated) with International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Hawaiian Holdings i.e., Hawaiian Holdings and International Consolidated go up and down completely randomly.

Pair Corralation between Hawaiian Holdings and International Consolidated

If you would invest  330.00  in International Consolidated Airlines on November 28, 2024 and sell it today you would earn a total of  102.00  from holding International Consolidated Airlines or generate 30.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Hawaiian Holdings  vs.  International Consolidated Air

Hawaiian Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hawaiian Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hawaiian Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

International Consolidated

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in International Consolidated Airlines are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, International Consolidated reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hawaiian Holdings and International Consolidated

The main advantage of trading using opposite Hawaiian Holdings and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Holdings position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.

The idea behind Hawaiian Holdings and International Consolidated Airlines 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.

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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 Stocks Directory module to find actively traded stocks across global markets.