Correlation Between United Airlines and Grupo KUO
Can any of the company-specific risk be diversified away by investing in both United Airlines and Grupo KUO 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 Grupo KUO 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 Grupo KUO SAB, you can compare the effects of market volatilities on United Airlines and Grupo KUO 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 Grupo KUO. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Grupo KUO.
Diversification Opportunities for United Airlines and Grupo KUO
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between United and Grupo is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Grupo KUO SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo KUO SAB 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 Grupo KUO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo KUO SAB has no effect on the direction of United Airlines i.e., United Airlines and Grupo KUO go up and down completely randomly.
Pair Corralation between United Airlines and Grupo KUO
Assuming the 90 days trading horizon United Airlines Holdings is expected to under-perform the Grupo KUO. In addition to that, United Airlines is 1.77 times more volatile than Grupo KUO SAB. It trades about -0.4 of its total potential returns per unit of risk. Grupo KUO SAB is currently generating about 0.08 per unit of volatility. If you would invest 4,298 in Grupo KUO SAB on December 9, 2024 and sell it today you would earn a total of 102.00 from holding Grupo KUO SAB or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Grupo KUO SAB
Performance |
| Timeline |
| United Airlines Holdings |
| Grupo KUO SAB |
United Airlines and Grupo KUO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Grupo KUO
The main advantage of trading using opposite United Airlines and Grupo KUO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Grupo KUO 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 Grupo KUO will offset losses from the drop in Grupo KUO's long position.| United Airlines vs. KB Home | ||
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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