Correlation Between United Airlines and Anaergia
Can any of the company-specific risk be diversified away by investing in both United Airlines and Anaergia 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 Anaergia 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 Anaergia, you can compare the effects of market volatilities on United Airlines and Anaergia 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 Anaergia. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Anaergia.
Diversification Opportunities for United Airlines and Anaergia
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Anaergia is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Anaergia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anaergia 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 Anaergia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anaergia has no effect on the direction of United Airlines i.e., United Airlines and Anaergia go up and down completely randomly.
Pair Corralation between United Airlines and Anaergia
Considering the 90-day investment horizon United Airlines is expected to generate 26.92 times less return on investment than Anaergia. But when comparing it to its historical volatility, United Airlines Holdings is 26.63 times less risky than Anaergia. It trades about 0.08 of its potential returns per unit of risk. Anaergia is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 80.00 in Anaergia on August 31, 2024 and sell it today you would lose (12.00) from holding Anaergia or give up 15.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
United Airlines Holdings vs. Anaergia
Performance |
| Timeline |
| United Airlines Holdings |
| Anaergia |
United Airlines and Anaergia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Anaergia
The main advantage of trading using opposite United Airlines and Anaergia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Anaergia 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 Anaergia will offset losses from the drop in Anaergia's long position.| United Airlines vs. American Airlines Group | United Airlines vs. Southwest Airlines | United Airlines vs. JetBlue Airways Corp | United Airlines vs. Delta Air Lines |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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