Correlation Between United Airlines and Martin Marietta
Can any of the company-specific risk be diversified away by investing in both United Airlines and Martin Marietta 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 Martin Marietta 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 Martin Marietta Materials,, you can compare the effects of market volatilities on United Airlines and Martin Marietta 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 Martin Marietta. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Martin Marietta.
Diversification Opportunities for United Airlines and Martin Marietta
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Martin is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Martin Marietta Materials, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Marietta Mate 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 Martin Marietta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Marietta Mate has no effect on the direction of United Airlines i.e., United Airlines and Martin Marietta go up and down completely randomly.
Pair Corralation between United Airlines and Martin Marietta
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 2.1 times more return on investment than Martin Marietta. However, United Airlines is 2.1 times more volatile than Martin Marietta Materials,. It trades about 0.26 of its potential returns per unit of risk. Martin Marietta Materials, is currently generating about -0.01 per unit of risk. If you would invest 13,429 in United Airlines Holdings on October 18, 2024 and sell it today you would earn a total of 18,098 from holding United Airlines Holdings or generate 134.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.19% |
| Values | Daily Returns |
United Airlines Holdings vs. Martin Marietta Materials,
Performance |
| Timeline |
| United Airlines Holdings |
| Martin Marietta Mate |
United Airlines and Martin Marietta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Martin Marietta
The main advantage of trading using opposite United Airlines and Martin Marietta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Martin Marietta 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 Martin Marietta will offset losses from the drop in Martin Marietta's long position.| United Airlines vs. Seagate Technology Holdings | United Airlines vs. Iron Mountain Incorporated | United Airlines vs. DXC Technology | United Airlines vs. Guidewire Software, |
| Martin Marietta vs. Bemobi Mobile Tech | Martin Marietta vs. United Airlines Holdings | Martin Marietta vs. ICICI Bank Limited | Martin Marietta vs. CRISPR Therapeutics AG |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |