Correlation Between Globus Medical, and United Airlines
Can any of the company-specific risk be diversified away by investing in both Globus Medical, 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 Globus Medical, and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globus Medical, and United Airlines Holdings, you can compare the effects of market volatilities on Globus Medical, 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 Globus Medical, with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globus Medical, and United Airlines.
Diversification Opportunities for Globus Medical, and United Airlines
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Globus and United is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Globus Medical, 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 Globus Medical, 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 Globus Medical, 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 Globus Medical, i.e., Globus Medical, and United Airlines go up and down completely randomly.
Pair Corralation between Globus Medical, and United Airlines
Assuming the 90 days trading horizon Globus Medical, is expected to generate 1.79 times less return on investment than United Airlines. In addition to that, Globus Medical, is 1.12 times more volatile than United Airlines Holdings. It trades about 0.13 of its total potential returns per unit of risk. United Airlines Holdings is currently generating about 0.27 per unit of volatility. If you would invest 29,174 in United Airlines Holdings on October 16, 2024 and sell it today you would earn a total of 3,303 from holding United Airlines Holdings or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globus Medical, vs. United Airlines Holdings
Performance |
| Timeline |
| Globus Medical, |
| United Airlines Holdings |
Globus Medical, and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globus Medical, and United Airlines
The main advantage of trading using opposite Globus Medical, and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globus Medical, 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.| Globus Medical, vs. United Rentals | Globus Medical, vs. Hospital Mater Dei | Globus Medical, vs. UnitedHealth Group Incorporated | Globus Medical, vs. Healthcare Realty Trust |
| United Airlines vs. Globus Medical, | United Airlines vs. Guidewire Software, | United Airlines vs. Charter Communications | United Airlines vs. Verizon Communications |
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.
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