Correlation Between BYD and United Airlines
Can any of the company-specific risk be diversified away by investing in both BYD 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 BYD and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Co and United Airlines Holdings, you can compare the effects of market volatilities on BYD 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 BYD with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD and United Airlines.
Diversification Opportunities for BYD and United Airlines
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between BYD and United is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding BYD Co 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 BYD 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 BYD Co 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 BYD i.e., BYD and United Airlines go up and down completely randomly.
Pair Corralation between BYD and United Airlines
Assuming the 90 days trading horizon BYD is expected to generate 3.63 times less return on investment than United Airlines. In addition to that, BYD is 2.4 times more volatile than United Airlines Holdings. It trades about 0.03 of its total potential returns per unit of risk. United Airlines Holdings is currently generating about 0.22 per unit of volatility. If you would invest 9,928 in United Airlines Holdings on October 24, 2024 and sell it today you would earn a total of 1,022 from holding United Airlines Holdings or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
BYD Co vs. United Airlines Holdings
Performance |
| Timeline |
| BYD Co |
| United Airlines Holdings |
BYD and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD and United Airlines
The main advantage of trading using opposite BYD and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD 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.| BYD vs. LBG Media PLC | BYD vs. Synthomer plc | BYD vs. G5 Entertainment AB | BYD vs. Ecclesiastical Insurance Office |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |