Correlation Between Goldman Sachs and American Airlines
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Centrated and American Airlines Group, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and American Airlines.
Diversification Opportunities for Goldman Sachs and American Airlines
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Goldman and American is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Centrated and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Goldman Sachs 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 Goldman Sachs Centrated 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 Goldman Sachs i.e., Goldman Sachs and American Airlines go up and down completely randomly.
Pair Corralation between Goldman Sachs and American Airlines
Assuming the 90 days horizon Goldman Sachs Centrated is expected to under-perform the American Airlines. In addition to that, Goldman Sachs is 1.88 times more volatile than American Airlines Group. It trades about -0.25 of its total potential returns per unit of risk. American Airlines Group is currently generating about -0.07 per unit of volatility. If you would invest 1,492 in American Airlines Group on January 24, 2024 and sell it today you would lose (69.00) from holding American Airlines Group or give up 4.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Centrated vs. American Airlines Group
Performance |
| Timeline |
| Goldman Sachs Centrated |
| American Airlines |
Goldman Sachs and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and American Airlines
The main advantage of trading using opposite Goldman Sachs and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |