Correlation Between Transcontinental and International Consolidated

Can any of the company-specific risk be diversified away by investing in both Transcontinental and International Consolidated 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 Transcontinental and International Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Transcontinental and International Consolidated Airlines, you can compare the effects of market volatilities on Transcontinental and International Consolidated 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 Transcontinental with a short position of International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcontinental and International Consolidated.

Diversification Opportunities for Transcontinental and International Consolidated

0.06

Correlation Coefficient

Transcontinental  International Consolidated

Significant diversification

The 3 months correlation between Transcontinental and International is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Transcontinental and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated and Transcontinental 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 Transcontinental are associated (or correlated) with International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Transcontinental i.e., Transcontinental and International Consolidated go up and down completely randomly.

Pair Corralation between Transcontinental and International Consolidated

Assuming the 90 days horizon Transcontinental is expected to under-perform the International Consolidated. But the pink sheet apears to be less risky and, when comparing its historical volatility, Transcontinental is 2.86 times less risky than International Consolidated. The pink sheet trades about -0.11 of its potential returns per unit of risk. The International Consolidated Airlines is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  527.00  in International Consolidated Airlines on July 20, 2025 and sell it today you would earn a total of  6.00  from holding International Consolidated Airlines or generate 1.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Transcontinental  vs.  International Consolidated Air

Transcontinental

Risk-Adjusted Performance

Weakest

Over the last 90 days Transcontinental has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

International Consolidated

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in International Consolidated Airlines are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, International Consolidated is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Transcontinental and International Consolidated

The main advantage of trading using opposite Transcontinental and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcontinental position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.

The idea behind Transcontinental and International Consolidated Airlines 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..