Correlation Between United Airlines and Prologis
Can any of the company-specific risk be diversified away by investing in both United Airlines and Prologis 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 Prologis 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 Prologis, you can compare the effects of market volatilities on United Airlines and Prologis 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 Prologis. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Prologis.
Diversification Opportunities for United Airlines and Prologis
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Prologis is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prologis 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 Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prologis has no effect on the direction of United Airlines i.e., United Airlines and Prologis go up and down completely randomly.
Pair Corralation between United Airlines and Prologis
Assuming the 90 days trading horizon United Airlines is expected to generate 1.07 times less return on investment than Prologis. But when comparing it to its historical volatility, United Airlines Holdings is 1.16 times less risky than Prologis. It trades about 0.2 of its potential returns per unit of risk. Prologis is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5,380 in Prologis on October 24, 2024 and sell it today you would earn a total of 478.00 from holding Prologis or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
United Airlines Holdings vs. Prologis
Performance |
| Timeline |
| United Airlines Holdings |
| Prologis |
United Airlines and Prologis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Prologis
The main advantage of trading using opposite United Airlines and Prologis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Prologis 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 Prologis will offset losses from the drop in Prologis' long position.| United Airlines vs. CRISPR Therapeutics AG | United Airlines vs. Broadridge Financial Solutions, | United Airlines vs. salesforce inc | United Airlines vs. Zoom Video Communications |
| Prologis vs. Micron Technology | Prologis vs. Bank of America | Prologis vs. Broadridge Financial Solutions, | Prologis vs. Mitsubishi UFJ Financial |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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