Correlation Between United Airlines and Coda Octopus
Can any of the company-specific risk be diversified away by investing in both United Airlines and Coda Octopus 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 Coda Octopus 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 Coda Octopus Group, you can compare the effects of market volatilities on United Airlines and Coda Octopus 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 Coda Octopus. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Coda Octopus.
Diversification Opportunities for United Airlines and Coda Octopus
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Coda is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Coda Octopus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coda Octopus Group 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 Coda Octopus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coda Octopus Group has no effect on the direction of United Airlines i.e., United Airlines and Coda Octopus go up and down completely randomly.
Pair Corralation between United Airlines and Coda Octopus
Considering the 90-day investment horizon United Airlines Holdings is expected to under-perform the Coda Octopus. In addition to that, United Airlines is 1.32 times more volatile than Coda Octopus Group. It trades about -0.24 of its total potential returns per unit of risk. Coda Octopus Group is currently generating about -0.28 per unit of volatility. If you would invest 880.00 in Coda Octopus Group on December 11, 2024 and sell it today you would lose (210.00) from holding Coda Octopus Group or give up 23.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Coda Octopus Group
Performance |
| Timeline |
| United Airlines Holdings |
| Coda Octopus Group |
United Airlines and Coda Octopus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Coda Octopus
The main advantage of trading using opposite United Airlines and Coda Octopus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Coda Octopus 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 Coda Octopus will offset losses from the drop in Coda Octopus' long position.| United Airlines vs. American Airlines Group | ||
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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