Correlation Between Phoenix New and American Airlines
Can any of the company-specific risk be diversified away by investing in both Phoenix New 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 Phoenix New and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phoenix New Media and American Airlines Group, you can compare the effects of market volatilities on Phoenix New 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 Phoenix New with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix New and American Airlines.
Diversification Opportunities for Phoenix New and American Airlines
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Phoenix and American is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix New Media and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Phoenix New 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 Phoenix New Media 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 Phoenix New i.e., Phoenix New and American Airlines go up and down completely randomly.
Pair Corralation between Phoenix New and American Airlines
Given the investment horizon of 90 days Phoenix New Media is expected to generate 2.01 times more return on investment than American Airlines. However, Phoenix New is 2.01 times more volatile than American Airlines Group. It trades about 0.14 of its potential returns per unit of risk. American Airlines Group is currently generating about -0.06 per unit of risk. If you would invest 164.00 in Phoenix New Media on January 20, 2024 and sell it today you would earn a total of 24.00 from holding Phoenix New Media or generate 14.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Phoenix New Media vs. American Airlines Group
Performance |
| Timeline |
| Phoenix New Media |
| American Airlines |
Phoenix New and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix New and American Airlines
The main advantage of trading using opposite Phoenix New and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix New 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 Phoenix New Media 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. 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |