Correlation Between United Airlines and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both United Airlines and Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC, you can compare the effects of market volatilities on United Airlines and Lendinvest PLC 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 Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Lendinvest PLC.
Diversification Opportunities for United Airlines and Lendinvest PLC
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Lendinvest is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest PLC 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 Lendinvest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendinvest PLC has no effect on the direction of United Airlines i.e., United Airlines and Lendinvest PLC go up and down completely randomly.
Pair Corralation between United Airlines and Lendinvest PLC
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 2.09 times more return on investment than Lendinvest PLC. However, United Airlines is 2.09 times more volatile than Lendinvest PLC. It trades about 0.48 of its potential returns per unit of risk. Lendinvest PLC is currently generating about 0.08 per unit of risk. If you would invest 7,650 in United Airlines Holdings on August 29, 2024 and sell it today you would earn a total of 2,171 from holding United Airlines Holdings or generate 28.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Airlines Holdings vs. Lendinvest PLC
Performance |
| Timeline |
| United Airlines Holdings |
| Lendinvest PLC |
United Airlines and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Lendinvest PLC
The main advantage of trading using opposite United Airlines and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Lendinvest PLC 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 Lendinvest PLC will offset losses from the drop in Lendinvest PLC's long position.| United Airlines vs. Lendinvest PLC | United Airlines vs. Neometals | United Airlines vs. Coor Service Management | United Airlines vs. Albion Technology General |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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