Correlation Between United Airlines and Aferian Plc
Can any of the company-specific risk be diversified away by investing in both United Airlines and Aferian Plc 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 Aferian Plc 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 Aferian Plc, you can compare the effects of market volatilities on United Airlines and Aferian Plc 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 Aferian Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Aferian Plc.
Diversification Opportunities for United Airlines and Aferian Plc
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Aferian is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Aferian Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aferian Plc 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 Aferian Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aferian Plc has no effect on the direction of United Airlines i.e., United Airlines and Aferian Plc go up and down completely randomly.
Pair Corralation between United Airlines and Aferian Plc
Considering the 90-day investment horizon United Airlines Holdings is expected to generate 0.26 times more return on investment than Aferian Plc. However, United Airlines Holdings is 3.87 times less risky than Aferian Plc. It trades about 0.31 of its potential returns per unit of risk. Aferian Plc is currently generating about -0.21 per unit of risk. If you would invest 8,042 in United Airlines Holdings on August 31, 2024 and sell it today you would earn a total of 1,593 from holding United Airlines Holdings or generate 19.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Aferian Plc
Performance |
| Timeline |
| United Airlines Holdings |
| Aferian Plc |
United Airlines and Aferian Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Aferian Plc
The main advantage of trading using opposite United Airlines and Aferian Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Aferian Plc 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 Aferian Plc will offset losses from the drop in Aferian Plc'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 |
| Aferian Plc vs. Legacy Education | Aferian Plc vs. Apple Inc | Aferian Plc vs. NVIDIA | Aferian Plc vs. Microsoft |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |