Correlation Between Seeing Machines and United Airlines
Can any of the company-specific risk be diversified away by investing in both Seeing Machines 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 Seeing Machines and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seeing Machines Limited and United Airlines Holdings, you can compare the effects of market volatilities on Seeing Machines 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 Seeing Machines with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seeing Machines and United Airlines.
Diversification Opportunities for Seeing Machines and United Airlines
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Seeing and United is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Seeing Machines Limited 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 Seeing Machines 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 Seeing Machines Limited 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 Seeing Machines i.e., Seeing Machines and United Airlines go up and down completely randomly.
Pair Corralation between Seeing Machines and United Airlines
Assuming the 90 days trading horizon Seeing Machines Limited is expected to under-perform the United Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Seeing Machines Limited is 1.17 times less risky than United Airlines. The stock trades about -0.05 of its potential returns per unit of risk. The United Airlines Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,111 in United Airlines Holdings on September 3, 2024 and sell it today you would earn a total of 5,657 from holding United Airlines Holdings or generate 137.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.01% |
| Values | Daily Returns |
Seeing Machines Limited vs. United Airlines Holdings
Performance |
| Timeline |
| Seeing Machines |
| United Airlines Holdings |
Seeing Machines and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seeing Machines and United Airlines
The main advantage of trading using opposite Seeing Machines and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seeing Machines 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.| Seeing Machines vs. Samsung Electronics Co | Seeing Machines vs. Samsung Electronics Co | Seeing Machines vs. Hyundai Motor | Seeing Machines vs. Toyota Motor Corp |
| United Airlines vs. Catalyst Media Group | United Airlines vs. CATLIN GROUP | United Airlines vs. RTW Venture Fund | United Airlines vs. Secure Property Development |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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