Correlation Between United Airlines and Global Crossing
Can any of the company-specific risk be diversified away by investing in both United Airlines and Global Crossing 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 Global Crossing 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 Global Crossing Airlines, you can compare the effects of market volatilities on United Airlines and Global Crossing 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 Global Crossing. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Global Crossing.
Diversification Opportunities for United Airlines and Global Crossing
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Global is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Global Crossing Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Crossing Airlines 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 Global Crossing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Crossing Airlines has no effect on the direction of United Airlines i.e., United Airlines and Global Crossing go up and down completely randomly.
Pair Corralation between United Airlines and Global Crossing
Considering the 90-day investment horizon United Airlines Holdings is expected to generate 0.55 times more return on investment than Global Crossing. However, United Airlines Holdings is 1.83 times less risky than Global Crossing. It trades about 0.07 of its potential returns per unit of risk. Global Crossing Airlines is currently generating about -0.01 per unit of risk. If you would invest 4,919 in United Airlines Holdings on November 2, 2024 and sell it today you would earn a total of 5,736 from holding United Airlines Holdings or generate 116.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
United Airlines Holdings vs. Global Crossing Airlines
Performance |
| Timeline |
| United Airlines Holdings |
| Global Crossing Airlines |
United Airlines and Global Crossing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Global Crossing
The main advantage of trading using opposite United Airlines and Global Crossing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Global Crossing 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 Global Crossing will offset losses from the drop in Global Crossing'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 |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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