Correlation Between Black Hills and United
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By analyzing existing cross correlation between Black Hills and United Airlines Holdings, you can compare the effects of market volatilities on Black Hills and United 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 Black Hills with a short position of United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Hills and United.
Diversification Opportunities for Black Hills and United
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Black and United is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Black Hills 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 Black Hills 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 Black Hills are associated (or correlated) with United. 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 Black Hills i.e., Black Hills and United go up and down completely randomly.
Pair Corralation between Black Hills and United
Considering the 90-day investment horizon Black Hills is expected to generate 2.25 times more return on investment than United. However, Black Hills is 2.25 times more volatile than United Airlines Holdings. It trades about 0.3 of its potential returns per unit of risk. United Airlines Holdings is currently generating about -0.21 per unit of risk. If you would invest 5,858 in Black Hills on September 1, 2024 and sell it today you would earn a total of 549.00 from holding Black Hills or generate 9.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Hills vs. United Airlines Holdings
Performance |
| Timeline |
| Black Hills |
| United Airlines Holdings |
Black Hills and United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Hills and United
The main advantage of trading using opposite Black Hills and United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Hills position performs unexpectedly, United 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 will offset losses from the drop in United's long position.| Black Hills vs. NorthWestern | Black Hills vs. Avista | Black Hills vs. Otter Tail | Black Hills vs. Companhia Paranaense de |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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