Correlation Between CMR SAB and United Airlines
Can any of the company-specific risk be diversified away by investing in both CMR SAB 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 CMR SAB and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMR SAB de and United Airlines Holdings, you can compare the effects of market volatilities on CMR SAB 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 CMR SAB with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMR SAB and United Airlines.
Diversification Opportunities for CMR SAB and United Airlines
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CMR and United is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CMR SAB de 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 CMR SAB 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 CMR SAB de 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 CMR SAB i.e., CMR SAB and United Airlines go up and down completely randomly.
Pair Corralation between CMR SAB and United Airlines
Assuming the 90 days trading horizon CMR SAB de is expected to under-perform the United Airlines. In addition to that, CMR SAB is 2.1 times more volatile than United Airlines Holdings. It trades about -0.18 of its total potential returns per unit of risk. United Airlines Holdings is currently generating about 0.52 per unit of volatility. If you would invest 146,900 in United Airlines Holdings on August 25, 2024 and sell it today you would earn a total of 45,299 from holding United Airlines Holdings or generate 30.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
CMR SAB de vs. United Airlines Holdings
Performance |
| Timeline |
| CMR SAB de |
| United Airlines Holdings |
CMR SAB and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMR SAB and United Airlines
The main advantage of trading using opposite CMR SAB and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMR SAB 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.| CMR SAB vs. Burlington Stores | CMR SAB vs. Cognizant Technology Solutions | CMR SAB vs. Verizon Communications | CMR SAB vs. McEwen Mining |
| United Airlines vs. Delta Air Lines | United Airlines vs. Southwest Airlines | United Airlines vs. JetBlue Airways | United Airlines vs. Controladora Vuela Compaa |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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