Correlation Between INVEX Controladora and United Airlines
Can any of the company-specific risk be diversified away by investing in both INVEX Controladora 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 INVEX Controladora and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INVEX Controladora SAB and United Airlines Holdings, you can compare the effects of market volatilities on INVEX Controladora 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 INVEX Controladora with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of INVEX Controladora and United Airlines.
Diversification Opportunities for INVEX Controladora and United Airlines
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INVEX and United is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding INVEX Controladora SAB 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 INVEX Controladora 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 INVEX Controladora SAB 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 INVEX Controladora i.e., INVEX Controladora and United Airlines go up and down completely randomly.
Pair Corralation between INVEX Controladora and United Airlines
Assuming the 90 days trading horizon INVEX Controladora is expected to generate 16.05 times less return on investment than United Airlines. But when comparing it to its historical volatility, INVEX Controladora SAB is 2.37 times less risky than United Airlines. It trades about 0.06 of its potential returns per unit of risk. United Airlines Holdings is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 160,849 in United Airlines Holdings on September 5, 2024 and sell it today you would earn a total of 38,648 from holding United Airlines Holdings or generate 24.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
INVEX Controladora SAB vs. United Airlines Holdings
Performance |
| Timeline |
| INVEX Controladora SAB |
| United Airlines Holdings |
INVEX Controladora and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INVEX Controladora and United Airlines
The main advantage of trading using opposite INVEX Controladora and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INVEX Controladora 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.| INVEX Controladora vs. United Airlines Holdings | INVEX Controladora vs. Lloyds Banking Group | INVEX Controladora vs. Costco Wholesale | INVEX Controladora vs. GMxico Transportes SAB |
| United Airlines vs. Grupo Carso SAB | United Airlines vs. McEwen Mining | United Airlines vs. KB Home | 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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