Correlation Between Learning Tree and American Airlines
Can any of the company-specific risk be diversified away by investing in both Learning Tree 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 Learning Tree and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Learning Tree International and American Airlines Group, you can compare the effects of market volatilities on Learning Tree 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 Learning Tree with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Learning Tree and American Airlines.
Diversification Opportunities for Learning Tree and American Airlines
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Learning and American is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Learning Tree International and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Learning Tree 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 Learning Tree International 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 Learning Tree i.e., Learning Tree and American Airlines go up and down completely randomly.
Pair Corralation between Learning Tree and American Airlines
If you would invest 105.00 in Learning Tree International on January 25, 2024 and sell it today you would earn a total of 0.00 from holding Learning Tree International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Learning Tree International vs. American Airlines Group
Performance |
| Timeline |
| Learning Tree Intern |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Airlines |
Learning Tree and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Learning Tree and American Airlines
The main advantage of trading using opposite Learning Tree and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Learning Tree 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.| Learning Tree vs. Stratasys | Learning Tree vs. United Utilities Group | Learning Tree vs. Kinetik Holdings | Learning Tree vs. Iridium Communications |
| 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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