Correlation Between Grieg Seafood and United Airlines
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood and United 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 Grieg Seafood and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grieg Seafood and United Airlines Holdings, you can compare the effects of market volatilities on Grieg Seafood and United 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 Grieg Seafood with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and United Airlines.
Diversification Opportunities for Grieg Seafood and United Airlines
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grieg and United is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings and Grieg Seafood 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 Grieg Seafood are associated (or correlated) with United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of Grieg Seafood i.e., Grieg Seafood and United Airlines go up and down completely randomly.
Pair Corralation between Grieg Seafood and United Airlines
Assuming the 90 days trading horizon Grieg Seafood is expected to generate 12.2 times less return on investment than United Airlines. But when comparing it to its historical volatility, Grieg Seafood is 1.06 times less risky than United Airlines. It trades about 0.02 of its potential returns per unit of risk. United Airlines Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 10,116 in United Airlines Holdings on October 25, 2024 and sell it today you would earn a total of 834.00 from holding United Airlines Holdings or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Grieg Seafood vs. United Airlines Holdings
Performance |
| Timeline |
| Grieg Seafood |
| United Airlines Holdings |
Grieg Seafood and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and United Airlines
The main advantage of trading using opposite Grieg Seafood and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood position performs unexpectedly, United 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 United Airlines will offset losses from the drop in United Airlines' long position.| Grieg Seafood vs. Electronic Arts | Grieg Seafood vs. Cairo Communication SpA | Grieg Seafood vs. Liontrust Asset Management | Grieg Seafood vs. Zegona Communications Plc |
| United Airlines vs. Grieg Seafood | United Airlines vs. AfriTin Mining | United Airlines vs. Fevertree Drinks Plc | United Airlines vs. First Majestic Silver |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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