Correlation Between First Republic and United Airlines
Can any of the company-specific risk be diversified away by investing in both First Republic 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 Republic 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 Republic Bank and United Airlines Holdings, you can compare the effects of market volatilities on First Republic 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 Republic with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and United Airlines.
Diversification Opportunities for First Republic and United Airlines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank 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 Republic 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 Republic Bank 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 Republic i.e., First Republic and United Airlines go up and down completely randomly.
Pair Corralation between First Republic and United Airlines
If you would invest 155,799 in United Airlines Holdings on August 29, 2024 and sell it today you would earn a total of 50,201 from holding United Airlines Holdings or generate 32.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Republic Bank vs. United Airlines Holdings
Performance |
| Timeline |
| First Republic Bank |
| United Airlines Holdings |
First Republic and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and United Airlines
The main advantage of trading using opposite First Republic and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic 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 Republic vs. First Majestic Silver | First Republic vs. Ameriprise Financial | First Republic vs. McEwen Mining | First Republic vs. Lloyds Banking Group |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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