Correlation Between LATAM Airlines and Hawaiian Holdings
Can any of the company-specific risk be diversified away by investing in both LATAM Airlines and Hawaiian Holdings 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 LATAM Airlines and Hawaiian Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LATAM Airlines Group and Hawaiian Holdings, you can compare the effects of market volatilities on LATAM Airlines and Hawaiian Holdings 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 LATAM Airlines with a short position of Hawaiian Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of LATAM Airlines and Hawaiian Holdings.
Diversification Opportunities for LATAM Airlines and Hawaiian Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LATAM and Hawaiian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LATAM Airlines Group and Hawaiian Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Holdings and LATAM 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 LATAM Airlines Group are associated (or correlated) with Hawaiian Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Holdings has no effect on the direction of LATAM Airlines i.e., LATAM Airlines and Hawaiian Holdings go up and down completely randomly.
Pair Corralation between LATAM Airlines and Hawaiian Holdings
If you would invest 1,696 in Hawaiian Holdings on January 19, 2024 and sell it today you would lose (361.00) from holding Hawaiian Holdings or give up 21.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
LATAM Airlines Group vs. Hawaiian Holdings
Performance |
| Timeline |
| LATAM Airlines Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hawaiian Holdings |
LATAM Airlines and Hawaiian Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LATAM Airlines and Hawaiian Holdings
The main advantage of trading using opposite LATAM Airlines and Hawaiian Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LATAM Airlines position performs unexpectedly, Hawaiian Holdings 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 Hawaiian Holdings will offset losses from the drop in Hawaiian Holdings' long position.| LATAM Airlines vs. Shake Shack | LATAM Airlines vs. Wingstop | LATAM Airlines vs. Kontoor Brands | LATAM Airlines vs. Kura Sushi USA |
| Hawaiian Holdings vs. Southwest Airlines | Hawaiian Holdings vs. JetBlue Airways Corp | Hawaiian Holdings vs. United Airlines Holdings | Hawaiian Holdings vs. Delta Air Lines |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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