Correlation Between Asuransi Jasa and American Airlines
Can any of the company-specific risk be diversified away by investing in both Asuransi Jasa 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 Asuransi Jasa and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asuransi Jasa Tania and American Airlines Group, you can compare the effects of market volatilities on Asuransi Jasa 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 Asuransi Jasa with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asuransi Jasa and American Airlines.
Diversification Opportunities for Asuransi Jasa and American Airlines
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Asuransi and American is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Jasa Tania and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Asuransi Jasa 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 Asuransi Jasa Tania 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 Asuransi Jasa i.e., Asuransi Jasa and American Airlines go up and down completely randomly.
Pair Corralation between Asuransi Jasa and American Airlines
Assuming the 90 days trading horizon Asuransi Jasa Tania is expected to generate 0.49 times more return on investment than American Airlines. However, Asuransi Jasa Tania is 2.05 times less risky than American Airlines. It trades about -0.12 of its potential returns per unit of risk. American Airlines Group is currently generating about -0.1 per unit of risk. If you would invest 11,900 in Asuransi Jasa Tania on January 25, 2024 and sell it today you would lose (300.00) from holding Asuransi Jasa Tania or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 68.18% |
| Values | Daily Returns |
Asuransi Jasa Tania vs. American Airlines Group
Performance |
| Timeline |
| Asuransi Jasa Tania |
| American Airlines |
Asuransi Jasa and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asuransi Jasa and American Airlines
The main advantage of trading using opposite Asuransi Jasa and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asuransi Jasa 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.| Asuransi Jasa vs. Astra International Tbk | Asuransi Jasa vs. United Tractors Tbk | Asuransi Jasa vs. Bukit Asam Tbk | Asuransi Jasa vs. Indofood Sukses Makmur |
| American Airlines vs. Delta Air Lines | American Airlines vs. Southwest Airlines | American Airlines vs. JetBlue Airways Corp | American Airlines vs. Spirit Airlines |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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