Correlation Between AMG Advanced and United Airlines
Can any of the company-specific risk be diversified away by investing in both AMG Advanced 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 AMG Advanced and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and United Airlines Holdings, you can compare the effects of market volatilities on AMG Advanced 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 AMG Advanced with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and United Airlines.
Diversification Opportunities for AMG Advanced and United Airlines
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMG and United is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical 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 AMG Advanced 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 AMG Advanced Metallurgical 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 AMG Advanced i.e., AMG Advanced and United Airlines go up and down completely randomly.
Pair Corralation between AMG Advanced and United Airlines
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the United Airlines. In addition to that, AMG Advanced is 1.58 times more volatile than United Airlines Holdings. It trades about 0.0 of its total potential returns per unit of risk. United Airlines Holdings is currently generating about 0.17 per unit of volatility. If you would invest 9,854 in United Airlines Holdings on October 30, 2024 and sell it today you would earn a total of 762.00 from holding United Airlines Holdings or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. United Airlines Holdings
Performance |
| Timeline |
| AMG Advanced Metallu |
| United Airlines Holdings |
AMG Advanced and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and United Airlines
The main advantage of trading using opposite AMG Advanced and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced 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.| AMG Advanced vs. Electronic Arts | AMG Advanced vs. Catalyst Media Group | AMG Advanced vs. Hollywood Bowl Group | AMG Advanced vs. Molson Coors Beverage |
| United Airlines vs. Gaztransport et Technigaz | United Airlines vs. Nordea Bank Abp | United Airlines vs. Take Two Interactive Software | United Airlines vs. Xeros Technology Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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