Correlation Between Grupo Sports and United Airlines
Can any of the company-specific risk be diversified away by investing in both Grupo Sports 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 Grupo Sports and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Sports World and United Airlines Holdings, you can compare the effects of market volatilities on Grupo Sports 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 Grupo Sports with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Sports and United Airlines.
Diversification Opportunities for Grupo Sports and United Airlines
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Grupo and United is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Sports World 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 Grupo Sports 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 Grupo Sports World 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 Grupo Sports i.e., Grupo Sports and United Airlines go up and down completely randomly.
Pair Corralation between Grupo Sports and United Airlines
Assuming the 90 days trading horizon Grupo Sports is expected to generate 7.23 times less return on investment than United Airlines. In addition to that, Grupo Sports is 1.22 times more volatile than United Airlines Holdings. It trades about 0.06 of its total potential returns per unit of risk. United Airlines Holdings is currently generating about 0.56 per unit of volatility. If you would invest 145,000 in United Airlines Holdings on August 24, 2024 and sell it today you would earn a total of 48,000 from holding United Airlines Holdings or generate 33.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Grupo Sports World vs. United Airlines Holdings
Performance |
| Timeline |
| Grupo Sports World |
| United Airlines Holdings |
Grupo Sports and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Sports and United Airlines
The main advantage of trading using opposite Grupo Sports and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Sports 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.| Grupo Sports vs. GMxico Transportes SAB | Grupo Sports vs. Taiwan Semiconductor Manufacturing | Grupo Sports vs. Monster Beverage Corp | Grupo Sports vs. DXC Technology |
| United Airlines vs. Delta Air Lines | United Airlines vs. Southwest Airlines | United Airlines vs. JetBlue Airways | United Airlines vs. Controladora Vuela Compaa |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |