Correlation Between United Airlines and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both United Airlines and Uber Technologies 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 Uber Technologies 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 Uber Technologies, you can compare the effects of market volatilities on United Airlines and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Uber Technologies.
Diversification Opportunities for United Airlines and Uber Technologies
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and Uber is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of United Airlines i.e., United Airlines and Uber Technologies go up and down completely randomly.
Pair Corralation between United Airlines and Uber Technologies
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 1.46 times more return on investment than Uber Technologies. However, United Airlines is 1.46 times more volatile than Uber Technologies. It trades about 0.43 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.11 per unit of risk. If you would invest 23,046 in United Airlines Holdings on September 1, 2024 and sell it today you would earn a total of 6,168 from holding United Airlines Holdings or generate 26.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Uber Technologies
Performance |
| Timeline |
| United Airlines Holdings |
| Uber Technologies |
United Airlines and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Uber Technologies
The main advantage of trading using opposite United Airlines and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.| United Airlines vs. Broadcom | United Airlines vs. Automatic Data Processing | United Airlines vs. Paycom Software | United Airlines vs. Electronic Arts |
| Uber Technologies vs. Warner Music Group | Uber Technologies vs. The Trade Desk | Uber Technologies vs. United Airlines Holdings | Uber Technologies vs. Tyson Foods |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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