Correlation Between SARTORIUS and United Airlines
Can any of the company-specific risk be diversified away by investing in both SARTORIUS 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 SARTORIUS and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SARTORIUS AG UNSPADR and United Airlines Holdings, you can compare the effects of market volatilities on SARTORIUS 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 SARTORIUS with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of SARTORIUS and United Airlines.
Diversification Opportunities for SARTORIUS and United Airlines
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SARTORIUS and United is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SARTORIUS AG UNSPADR 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 SARTORIUS 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 SARTORIUS AG UNSPADR 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 SARTORIUS i.e., SARTORIUS and United Airlines go up and down completely randomly.
Pair Corralation between SARTORIUS and United Airlines
Assuming the 90 days trading horizon SARTORIUS AG UNSPADR is expected to under-perform the United Airlines. In addition to that, SARTORIUS is 1.16 times more volatile than United Airlines Holdings. It trades about -0.04 of its total potential returns per unit of risk. United Airlines Holdings is currently generating about 0.08 per unit of volatility. If you would invest 4,787 in United Airlines Holdings on August 26, 2024 and sell it today you would earn a total of 4,197 from holding United Airlines Holdings or generate 87.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.7% |
| Values | Daily Returns |
SARTORIUS AG UNSPADR vs. United Airlines Holdings
Performance |
| Timeline |
| SARTORIUS AG UNSPADR |
| United Airlines Holdings |
SARTORIUS and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SARTORIUS and United Airlines
The main advantage of trading using opposite SARTORIUS and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SARTORIUS 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.| SARTORIUS vs. United Airlines Holdings | SARTORIUS vs. Singapore Airlines Limited | SARTORIUS vs. Gol Intelligent Airlines | SARTORIUS vs. INTERSHOP Communications Aktiengesellschaft |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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