Correlation Between Torchmark and American Airlines
Can any of the company-specific risk be diversified away by investing in both Torchmark 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 Torchmark and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Torchmark and American Airlines Group, you can compare the effects of market volatilities on Torchmark 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 Torchmark with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Torchmark and American Airlines.
Diversification Opportunities for Torchmark and American Airlines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Torchmark and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Torchmark and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Torchmark 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 Torchmark 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 Torchmark i.e., Torchmark and American Airlines go up and down completely randomly.
Pair Corralation between Torchmark and American Airlines
If you would invest (100.00) in Torchmark on December 29, 2023 and sell it today you would earn a total of 100.00 from holding Torchmark or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Torchmark vs. American Airlines Group
Performance |
Timeline |
Torchmark |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
American Airlines |
Torchmark and American Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Torchmark and American Airlines
The main advantage of trading using opposite Torchmark and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Torchmark 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.The idea behind Torchmark and American Airlines Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.American Airlines vs. Canadian Pacific Railway | American Airlines vs. Daseke Inc | American Airlines vs. Marten Transport | American Airlines vs. Werner Enterprises |
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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Transaction History View history of all your transactions and understand their impact on performance | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |