Correlation Between SHIP HEALTHCARE and United Airlines
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE 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 SHIP HEALTHCARE and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and United Airlines Holdings, you can compare the effects of market volatilities on SHIP HEALTHCARE 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 SHIP HEALTHCARE with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and United Airlines.
Diversification Opportunities for SHIP HEALTHCARE and United Airlines
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SHIP and United is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE i.e., SHIP HEALTHCARE and United Airlines go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and United Airlines
Assuming the 90 days horizon SHIP HEALTHCARE is expected to generate 1.52 times less return on investment than United Airlines. In addition to that, SHIP HEALTHCARE is 1.3 times more volatile than United Airlines Holdings. It trades about 0.07 of its total potential returns per unit of risk. United Airlines Holdings is currently generating about 0.14 per unit of volatility. If you would invest 3,795 in United Airlines Holdings on September 4, 2024 and sell it today you would earn a total of 5,347 from holding United Airlines Holdings or generate 140.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. United Airlines Holdings
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| United Airlines Holdings |
SHIP HEALTHCARE and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and United Airlines
The main advantage of trading using opposite SHIP HEALTHCARE and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE 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.| SHIP HEALTHCARE vs. THRACE PLASTICS | SHIP HEALTHCARE vs. Rayonier Advanced Materials | SHIP HEALTHCARE vs. SANOK RUBBER ZY | SHIP HEALTHCARE vs. Gruppo Mutuionline SpA |
| United Airlines vs. Delta Air Lines | United Airlines vs. AIR CHINA LTD | United Airlines vs. RYANAIR HLDGS ADR | United Airlines vs. Southwest Airlines Co |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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