Correlation Between United Airlines and Vitro SAB
Can any of the company-specific risk be diversified away by investing in both United Airlines and Vitro SAB 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 Vitro SAB 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 Vitro SAB de, you can compare the effects of market volatilities on United Airlines and Vitro SAB 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 Vitro SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Vitro SAB.
Diversification Opportunities for United Airlines and Vitro SAB
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Vitro is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Vitro SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitro SAB de 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 Vitro SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitro SAB de has no effect on the direction of United Airlines i.e., United Airlines and Vitro SAB go up and down completely randomly.
Pair Corralation between United Airlines and Vitro SAB
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 2.57 times more return on investment than Vitro SAB. However, United Airlines is 2.57 times more volatile than Vitro SAB de. It trades about 0.37 of its potential returns per unit of risk. Vitro SAB de is currently generating about 0.11 per unit of risk. If you would invest 162,100 in United Airlines Holdings on September 2, 2024 and sell it today you would earn a total of 34,700 from holding United Airlines Holdings or generate 21.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Vitro SAB de
Performance |
| Timeline |
| United Airlines Holdings |
| Vitro SAB de |
United Airlines and Vitro SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Vitro SAB
The main advantage of trading using opposite United Airlines and Vitro SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Vitro SAB 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 Vitro SAB will offset losses from the drop in Vitro SAB's long position.| United Airlines vs. Grupo Hotelero Santa | United Airlines vs. UnitedHealth Group Incorporated | United Airlines vs. Micron Technology | United Airlines vs. Delta Air Lines |
| Vitro SAB vs. Applied Materials | Vitro SAB vs. Samsung Electronics Co | Vitro SAB vs. United Airlines Holdings | Vitro SAB vs. McEwen Mining |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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