Pair Correlation Between American Airlines and Best Buy

This module allows you to analyze existing cross correlation between American Airlines Group Inc and Best Buy Co Inc. You can compare the effects of market volatilities on American Airlines and Best Buy 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 Best Buy. See also your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Best Buy.
Investment Horizon     30 Days    Login   to change
 American Airlines Group Inc.  vs   Best Buy Co. Inc.
 Performance (%) 
Benchmark  Embed    Timeline 

Pair Volatility

Considering 30-days investment horizon, American Airlines Group Inc is expected to under-perform the Best Buy. But the stock apears to be less risky and, when comparing its historical volatility, American Airlines Group Inc is 1.24 times less risky than Best Buy. The stock trades about -0.22 of its potential returns per unit of risk. The Best Buy Co Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  4,431  in Best Buy Co Inc on February 23, 2017 and sell it today you would earn a total of  54.00  from holding Best Buy Co Inc or generate 1.22% return on investment over 30 days.
Correlation Coefficient
Pair Corralation between American Airlines and Best Buy
-0.2

Parameters

Time Period1 Month [change]
DirectionNegative AAL Moved Down vs BBY
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Diversification

Good diversification

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

Comparative Volatility

 Predicted Return Density 
Benchmark  Embed    Returns 

American Airlines Group

  
0 

Risk-Adjusted Performance

Over the last 30 days American Airlines Group Inc has generated negative risk-adjusted returns adding no value to investors with long positions.

Best Buy Co

  
2 

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Best Buy Co Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 30 days.