Correlation Between United Airlines and Travel Leisure
Can any of the company-specific risk be diversified away by investing in both United Airlines and Travel Leisure 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 United Airlines and Travel Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Airlines Holdings and Travel Leisure Co, you can compare the effects of market volatilities on United Airlines and Travel Leisure 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 United Airlines with a short position of Travel Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Travel Leisure.
Diversification Opportunities for United Airlines and Travel Leisure
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and Travel is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Travel Leisure Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travel Leisure and United Airlines 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 United Airlines Holdings are associated (or correlated) with Travel Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travel Leisure has no effect on the direction of United Airlines i.e., United Airlines and Travel Leisure go up and down completely randomly.
Pair Corralation between United Airlines and Travel Leisure
If you would invest 9,527 in United Airlines Holdings on November 3, 2024 and sell it today you would earn a total of 1,191 from holding United Airlines Holdings or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Airlines Holdings vs. Travel Leisure Co
Performance |
| Timeline |
| United Airlines Holdings |
| Travel Leisure |
United Airlines and Travel Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Travel Leisure
The main advantage of trading using opposite United Airlines and Travel Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Travel Leisure 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 Travel Leisure will offset losses from the drop in Travel Leisure's long position.| United Airlines vs. AMG Advanced Metallurgical | United Airlines vs. Adriatic Metals | United Airlines vs. McEwen Mining | United Airlines vs. Lundin Mining Corp |
| Travel Leisure vs. Samsung Electronics Co | Travel Leisure vs. Samsung Electronics Co | Travel Leisure vs. Toyota Motor Corp | Travel Leisure vs. Reliance Industries Ltd |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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