Correlation Between United Airlines and Fair Isaac
Can any of the company-specific risk be diversified away by investing in both United Airlines and Fair Isaac 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 United Airlines and Fair Isaac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Airlines Holdings and Fair Isaac, you can compare the effects of market volatilities on United Airlines and Fair Isaac 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 United Airlines with a short position of Fair Isaac. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Fair Isaac.
Diversification Opportunities for United Airlines and Fair Isaac
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Fair is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Fair Isaac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac and United Airlines 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 United Airlines Holdings are associated (or correlated) with Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac has no effect on the direction of United Airlines i.e., United Airlines and Fair Isaac go up and down completely randomly.
Pair Corralation between United Airlines and Fair Isaac
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 1.26 times more return on investment than Fair Isaac. However, United Airlines is 1.26 times more volatile than Fair Isaac. It trades about 0.35 of its potential returns per unit of risk. Fair Isaac is currently generating about -0.41 per unit of risk. If you would invest 28,908 in United Airlines Holdings on October 14, 2024 and sell it today you would earn a total of 3,692 from holding United Airlines Holdings or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Fair Isaac
Performance |
| Timeline |
| United Airlines Holdings |
| Fair Isaac |
United Airlines and Fair Isaac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Fair Isaac
The main advantage of trading using opposite United Airlines and Fair Isaac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Fair Isaac 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 Fair Isaac will offset losses from the drop in Fair Isaac's long position.| United Airlines vs. TechnipFMC plc | United Airlines vs. Caesars Entertainment, | United Airlines vs. United States Steel | United Airlines vs. DENTSPLY SIRONA |
| Fair Isaac vs. Taiwan Semiconductor Manufacturing | Fair Isaac vs. Apple Inc | Fair Isaac vs. Alibaba Group Holding | Fair Isaac vs. Banco Santander Chile |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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