Correlation Between United Airlines and DFDS AS
Can any of the company-specific risk be diversified away by investing in both United Airlines and DFDS AS 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 DFDS AS 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 DFDS AS, you can compare the effects of market volatilities on United Airlines and DFDS AS 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 DFDS AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and DFDS AS.
Diversification Opportunities for United Airlines and DFDS AS
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and DFDS is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and DFDS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFDS AS 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 DFDS AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFDS AS has no effect on the direction of United Airlines i.e., United Airlines and DFDS AS go up and down completely randomly.
Pair Corralation between United Airlines and DFDS AS
Considering the 90-day investment horizon United Airlines Holdings is expected to generate 1.15 times more return on investment than DFDS AS. However, United Airlines is 1.15 times more volatile than DFDS AS. It trades about 0.09 of its potential returns per unit of risk. DFDS AS is currently generating about -0.01 per unit of risk. If you would invest 3,828 in United Airlines Holdings on September 12, 2024 and sell it today you would earn a total of 5,990 from holding United Airlines Holdings or generate 156.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
United Airlines Holdings vs. DFDS AS
Performance |
| Timeline |
| United Airlines Holdings |
| DFDS AS |
United Airlines and DFDS AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and DFDS AS
The main advantage of trading using opposite United Airlines and DFDS AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, DFDS AS 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 DFDS AS will offset losses from the drop in DFDS AS'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 |
| DFDS AS vs. Copa Holdings SA | DFDS AS vs. United Airlines Holdings | DFDS AS vs. Delta Air Lines | DFDS AS vs. SkyWest |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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