Correlation Between Technos SA and United Airlines
Can any of the company-specific risk be diversified away by investing in both Technos SA 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 Technos SA and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technos SA and United Airlines Holdings, you can compare the effects of market volatilities on Technos SA 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 Technos SA with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technos SA and United Airlines.
Diversification Opportunities for Technos SA and United Airlines
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Technos and United is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Technos SA 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 Technos SA 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 Technos SA 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 Technos SA i.e., Technos SA and United Airlines go up and down completely randomly.
Pair Corralation between Technos SA and United Airlines
Assuming the 90 days trading horizon Technos SA is expected to generate 2.07 times less return on investment than United Airlines. In addition to that, Technos SA is 2.21 times more volatile than United Airlines Holdings. It trades about 0.05 of its total potential returns per unit of risk. United Airlines Holdings is currently generating about 0.23 per unit of volatility. If you would invest 25,950 in United Airlines Holdings on September 19, 2024 and sell it today you would earn a total of 2,557 from holding United Airlines Holdings or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Technos SA vs. United Airlines Holdings
Performance |
| Timeline |
| Technos SA |
| United Airlines Holdings |
Technos SA and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technos SA and United Airlines
The main advantage of trading using opposite Technos SA and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technos SA 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.| Technos SA vs. Tupy SA | Technos SA vs. Engie Brasil Energia | Technos SA vs. Grendene SA | Technos SA vs. M Dias Branco |
| United Airlines vs. SVB Financial Group | United Airlines vs. NXP Semiconductors NV | United Airlines vs. Fidelity National Information | United Airlines vs. Bank of America |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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