Correlation Between SunOpta and United Airlines
Can any of the company-specific risk be diversified away by investing in both SunOpta 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 SunOpta and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and United Airlines Holdings, you can compare the effects of market volatilities on SunOpta 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 SunOpta with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and United Airlines.
Diversification Opportunities for SunOpta and United Airlines
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SunOpta and United is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta 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 SunOpta 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 SunOpta 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 SunOpta i.e., SunOpta and United Airlines go up and down completely randomly.
Pair Corralation between SunOpta and United Airlines
Given the investment horizon of 90 days SunOpta is expected to generate 10.78 times less return on investment than United Airlines. In addition to that, SunOpta is 1.33 times more volatile than United Airlines Holdings. It trades about 0.01 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 4,335 in United Airlines Holdings on August 31, 2024 and sell it today you would earn a total of 5,348 from holding United Airlines Holdings or generate 123.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. United Airlines Holdings
Performance |
| Timeline |
| SunOpta |
| United Airlines Holdings |
SunOpta and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and United Airlines
The main advantage of trading using opposite SunOpta and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta 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.| SunOpta vs. Central Garden Pet | SunOpta vs. Bridgford Foods | SunOpta vs. Lancaster Colony | SunOpta vs. HUMANA INC |
| United Airlines vs. American Airlines Group | United Airlines vs. Southwest Airlines | United Airlines vs. JetBlue Airways Corp | United Airlines vs. Delta Air Lines |
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 Stocks Directory module to find actively traded stocks across global markets.
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