Correlation Analysis Between American Airlines and Home Depot

This module allows you to analyze existing cross correlation between American Airlines Group and Home Depot. You can compare the effects of market volatilities on American Airlines and Home Depot 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 Home Depot. See also your portfolio center. Please also check ongoing floating volatility patterns of American Airlines and Home Depot.
Horizon     30 Days    Login   to change
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Comparative Performance

American Airlines  
00

Risk-Adjusted Performance

Over the last 30 days American Airlines Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with sluggish performance in the last few months, the Stock's technical indicators remain considerably steady which may send shares a bit higher in September 2019. The new chaos may also be a sign of medium term up-swing for the business stakeholders.
Home Depot  
88

Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Home Depot are ranked lower than 8 (%) of all global equities and portfolios over the last 30 days. In spite of rather fragile fundamental drivers, Home Depot may actually be approaching a critical reversion point that can send shares even higher in September 2019.

American Airlines and Home Depot Volatility Contrast

 Predicted Return Density 
      Returns 

American Airlines Group Inc  vs.  Home Depot Inc

 Performance (%) 
      Timeline 

Pair Volatility

Considering 30-days investment horizon, American Airlines Group is expected to under-perform the Home Depot. In addition to that, American Airlines is 1.64 times more volatile than Home Depot. It trades about -0.18 of its total potential returns per unit of risk. Home Depot is currently generating about 0.13 per unit of volatility. If you would invest  20,550  in Home Depot on July 23, 2019 and sell it today you would earn a total of  1,552  from holding Home Depot or generate 7.55% return on investment over 30 days.

Pair Corralation between American Airlines and Home Depot

0.31
Time Period2 Months [change]
DirectionPositive 
StrengthVery Weak
Accuracy97.73%
ValuesDaily Returns

Diversification Opportunities for American Airlines and Home Depot

American Airlines Group Inc diversification synergy

Weak diversification

Overlapping area represents the amount of risk that can be diversified away by holding American Airlines Group Inc and Home Depot Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Home Depot 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 Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of American Airlines i.e. American Airlines and Home Depot go up and down completely randomly.
See also your portfolio center. Please also try Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.


 
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