Correlation Between Pettenati and United Airlines
Can any of the company-specific risk be diversified away by investing in both Pettenati 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 Pettenati and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pettenati SA Industria and United Airlines Holdings, you can compare the effects of market volatilities on Pettenati 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 Pettenati with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pettenati and United Airlines.
Diversification Opportunities for Pettenati and United Airlines
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pettenati and United is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pettenati SA Industria 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 Pettenati 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 Pettenati SA Industria 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 Pettenati i.e., Pettenati and United Airlines go up and down completely randomly.
Pair Corralation between Pettenati and United Airlines
Assuming the 90 days trading horizon Pettenati SA Industria is expected to under-perform the United Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Pettenati SA Industria is 1.96 times less risky than United Airlines. The stock trades about -0.26 of its potential returns per unit of risk. The United Airlines Holdings is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 23,046 in United Airlines Holdings on September 1, 2024 and sell it today you would earn a total of 6,168 from holding United Airlines Holdings or generate 26.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Pettenati SA Industria vs. United Airlines Holdings
Performance |
| Timeline |
| Pettenati SA Industria |
| United Airlines Holdings |
Pettenati and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pettenati and United Airlines
The main advantage of trading using opposite Pettenati and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pettenati 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.| Pettenati vs. United Airlines Holdings | Pettenati vs. Costco Wholesale | Pettenati vs. TAL Education Group | Pettenati vs. Marvell Technology |
| United Airlines vs. Broadcom | United Airlines vs. Automatic Data Processing | United Airlines vs. Paycom Software | United Airlines vs. Electronic Arts |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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