Correlation Between FlyExclusive, and American Airlines

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

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

Diversification Opportunities for FlyExclusive, and American Airlines

-0.8

Correlation Coefficient

FlyExclusive,  American Airlines

Pay attention - limited upside

The 3 months correlation between FlyExclusive, and American is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding flyExclusive, and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and FlyExclusive, 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 flyExclusive, 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 FlyExclusive, i.e., FlyExclusive, and American Airlines go up and down completely randomly.

Pair Corralation between FlyExclusive, and American Airlines

Given the investment horizon of 90 days flyExclusive, is expected to under-perform the American Airlines. In addition to that, FlyExclusive, is 2.46 times more volatile than American Airlines Group. It trades about -0.14 of its total potential returns per unit of risk. American Airlines Group is currently generating about 0.22 per unit of volatility. If you would invest  1,060  in American Airlines Group on September 1, 2024 and sell it today you would earn a total of  392.00  from holding American Airlines Group or generate 36.98% return on investment over 90 days.

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

flyExclusive,  vs.  American Airlines Group

flyExclusive,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days flyExclusive, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

American Airlines

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in American Airlines Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, American Airlines disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FlyExclusive, and American Airlines

The main advantage of trading using opposite FlyExclusive, and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlyExclusive, 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 flyExclusive, 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.