Correlation Between Arcontech Group and United Airlines
Can any of the company-specific risk be diversified away by investing in both Arcontech Group 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 Arcontech Group and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcontech Group Plc and United Airlines Holdings, you can compare the effects of market volatilities on Arcontech Group 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 Arcontech Group with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcontech Group and United Airlines.
Diversification Opportunities for Arcontech Group and United Airlines
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Arcontech and United is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Arcontech Group Plc 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 Arcontech Group 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 Arcontech Group Plc 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 Arcontech Group i.e., Arcontech Group and United Airlines go up and down completely randomly.
Pair Corralation between Arcontech Group and United Airlines
Assuming the 90 days trading horizon Arcontech Group Plc is expected to under-perform the United Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Arcontech Group Plc is 2.0 times less risky than United Airlines. The stock trades about -0.33 of its potential returns per unit of risk. The United Airlines Holdings is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 9,527 in United Airlines Holdings on November 2, 2024 and sell it today you would earn a total of 1,364 from holding United Airlines Holdings or generate 14.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Arcontech Group Plc vs. United Airlines Holdings
Performance |
| Timeline |
| Arcontech Group Plc |
| United Airlines Holdings |
Arcontech Group and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcontech Group and United Airlines
The main advantage of trading using opposite Arcontech Group and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcontech Group 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.| Arcontech Group vs. China Pacific Insurance | Arcontech Group vs. Cairo Communication SpA | Arcontech Group vs. Spirent Communications plc | Arcontech Group vs. Verizon Communications |
| United Airlines vs. Jacquet Metal Service | United Airlines vs. Centaur Media | United Airlines vs. Cornish Metals | United Airlines vs. Advanced Medical Solutions |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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