Correlation Between Sigma Designs and American Airlines
Can any of the company-specific risk be diversified away by investing in both Sigma Designs 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 Sigma Designs and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sigma Designs and American Airlines Group, you can compare the effects of market volatilities on Sigma Designs 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 Sigma Designs with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sigma Designs and American Airlines.
Diversification Opportunities for Sigma Designs and American Airlines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sigma and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sigma Designs and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Sigma Designs 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 Sigma Designs 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 Sigma Designs i.e., Sigma Designs and American Airlines go up and down completely randomly.
Pair Corralation between Sigma Designs and American Airlines
If you would invest 1,393 in American Airlines Group on January 19, 2024 and sell it today you would earn a total of 9.00 from holding American Airlines Group or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Sigma Designs vs. American Airlines Group
Performance |
| Timeline |
| Sigma Designs |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Airlines |
Sigma Designs and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sigma Designs and American Airlines
The main advantage of trading using opposite Sigma Designs and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sigma Designs 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.| Sigma Designs vs. PNM Resources | Sigma Designs vs. Paysafe | Sigma Designs vs. NETGEAR | Sigma Designs vs. CenterPoint Energy |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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