This module allows you to analyze existing cross correlation between American Airlines Group and Alcoa Corporation. You can compare the effects of market volatilities on American Airlines and Alcoa 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 Alcoa. See also your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Alcoa.
|Horizon||30 Days Login to change|
Over the last 30 days American Airlines Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with considerably steady technical indicators, American Airlines is not utilizing all of its potentials. The current stock price chaos, may contribute to medium term losses for the stakeholders.
Over the last 30 days Alcoa Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in July 2019. The current disturbance may also be a sign of long term up-swing for the company investors.
American Airlines and Alcoa Volatility Contrast
Predicted Return Density
American Airlines Group Inc vs. Alcoa Corp.
Considering 30-days investment horizon, American Airlines Group is expected to generate 1.23 times more return on investment than Alcoa. However, American Airlines is 1.23 times more volatile than Alcoa Corporation. It trades about -0.03 of its potential returns per unit of risk. Alcoa Corporation is currently generating about -0.24 per unit of risk. If you would invest 3,306 in American Airlines Group on May 26, 2019 and sell it today you would lose (124.00) from holding American Airlines Group or give up 3.75% of portfolio value over 30 days.
Pair Corralation between American Airlines and Alcoa
|Time Period||2 Months [change]|
Diversification Opportunities for American Airlines and Alcoa
Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group Inc and Alcoa Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Alcoa 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 Alcoa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcoa has no effect on the direction of American Airlines i.e. American Airlines and Alcoa go up and down completely randomly.
See also your portfolio center. Please also try Watchlist Optimization module to optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm.