Correlation Between United Airlines and National Beverage
Can any of the company-specific risk be diversified away by investing in both United Airlines and National Beverage 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 National Beverage 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 National Beverage Corp, you can compare the effects of market volatilities on United Airlines and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and National Beverage.
Diversification Opportunities for United Airlines and National Beverage
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and National is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of United Airlines i.e., United Airlines and National Beverage go up and down completely randomly.
Pair Corralation between United Airlines and National Beverage
Considering the 90-day investment horizon United Airlines Holdings is expected to generate 1.89 times more return on investment than National Beverage. However, United Airlines is 1.89 times more volatile than National Beverage Corp. It trades about 0.41 of its potential returns per unit of risk. National Beverage Corp is currently generating about 0.26 per unit of risk. If you would invest 7,609 in United Airlines Holdings on August 28, 2024 and sell it today you would earn a total of 2,074 from holding United Airlines Holdings or generate 27.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. National Beverage Corp
Performance |
| Timeline |
| United Airlines Holdings |
| National Beverage Corp |
United Airlines and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and National Beverage
The main advantage of trading using opposite United Airlines and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| United Airlines vs. American Airlines Group | United Airlines vs. Southwest Airlines | United Airlines vs. JetBlue Airways Corp | United Airlines vs. Spirit Airlines |
| National Beverage vs. Celsius Holdings | National Beverage vs. Monster Beverage Corp | National Beverage vs. Coca Cola Femsa SAB | National Beverage vs. Keurig Dr Pepper |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |