Correlation Between United Airlines and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both United Airlines and McEwen Mining 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 McEwen Mining 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 McEwen Mining, you can compare the effects of market volatilities on United Airlines and McEwen Mining 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 McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and McEwen Mining.
Diversification Opportunities for United Airlines and McEwen Mining
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and McEwen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of United Airlines i.e., United Airlines and McEwen Mining go up and down completely randomly.
Pair Corralation between United Airlines and McEwen Mining
If you would invest 145,000 in United Airlines Holdings on August 24, 2024 and sell it today you would earn a total of 48,000 from holding United Airlines Holdings or generate 33.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
United Airlines Holdings vs. McEwen Mining
Performance |
| Timeline |
| United Airlines Holdings |
| McEwen Mining |
United Airlines and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and McEwen Mining
The main advantage of trading using opposite United Airlines and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| United Airlines vs. Delta Air Lines | United Airlines vs. Southwest Airlines | United Airlines vs. JetBlue Airways | United Airlines vs. Controladora Vuela Compaa |
| McEwen Mining vs. Verizon Communications | McEwen Mining vs. Monster Beverage Corp | McEwen Mining vs. CVS Health | McEwen Mining vs. Grupo Sports World |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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