Correlation Between Tres Tentos and American Airlines
Can any of the company-specific risk be diversified away by investing in both Tres Tentos 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 Tres Tentos and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tres Tentos Agroindustrial and American Airlines Group, you can compare the effects of market volatilities on Tres Tentos 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 Tres Tentos with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tres Tentos and American Airlines.
Diversification Opportunities for Tres Tentos and American Airlines
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tres and American is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tres Tentos Agroindustrial and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Tres Tentos 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 Tres Tentos Agroindustrial 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 Tres Tentos i.e., Tres Tentos and American Airlines go up and down completely randomly.
Pair Corralation between Tres Tentos and American Airlines
Assuming the 90 days trading horizon Tres Tentos is expected to generate 1.02 times less return on investment than American Airlines. But when comparing it to its historical volatility, Tres Tentos Agroindustrial is 1.06 times less risky than American Airlines. It trades about 0.05 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,733 in American Airlines Group on September 23, 2024 and sell it today you would earn a total of 3,637 from holding American Airlines Group or generate 54.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 99.8% |
Values | Daily Returns |
Tres Tentos Agroindustrial vs. American Airlines Group
Performance |
Timeline |
Tres Tentos Agroindu |
American Airlines |
Tres Tentos and American Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tres Tentos and American Airlines
The main advantage of trading using opposite Tres Tentos and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tres Tentos 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.Tres Tentos vs. The Mosaic | Tres Tentos vs. Boa Safra Sementes | Tres Tentos vs. Fertilizantes Heringer SA |
American Airlines vs. Take Two Interactive Software | American Airlines vs. Bemobi Mobile Tech | American Airlines vs. New Oriental Education | American Airlines vs. Paycom Software |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Global Correlations Find global opportunities by holding instruments from different markets | |
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 | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |