Correlation Between First Majestic and United Airlines
Can any of the company-specific risk be diversified away by investing in both First Majestic 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 First Majestic and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Majestic Silver and United Airlines Holdings, you can compare the effects of market volatilities on First Majestic 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 First Majestic with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and United Airlines.
Diversification Opportunities for First Majestic and United Airlines
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and United is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver 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 First Majestic 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 First Majestic Silver 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 First Majestic i.e., First Majestic and United Airlines go up and down completely randomly.
Pair Corralation between First Majestic and United Airlines
Assuming the 90 days horizon First Majestic is expected to generate 8.77 times less return on investment than United Airlines. But when comparing it to its historical volatility, First Majestic Silver is 2.69 times less risky than United Airlines. It trades about 0.03 of its potential returns per unit of risk. United Airlines Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 81,630 in United Airlines Holdings on August 29, 2024 and sell it today you would earn a total of 124,370 from holding United Airlines Holdings or generate 152.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. United Airlines Holdings
Performance |
| Timeline |
| First Majestic Silver |
| United Airlines Holdings |
First Majestic and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and United Airlines
The main advantage of trading using opposite First Majestic and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic 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.| First Majestic vs. Visa Inc | First Majestic vs. Desarrolladora Homex SAB | First Majestic vs. CMR SAB de | First Majestic vs. The Select Sector |
| United Airlines vs. New Oriental Education | United Airlines vs. Monster Beverage Corp | United Airlines vs. Hoteles City Express | United Airlines vs. Micron Technology |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |