Correlation Between United Airlines and Sligro Food
Can any of the company-specific risk be diversified away by investing in both United Airlines and Sligro Food 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 Sligro Food 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 Sligro Food Group, you can compare the effects of market volatilities on United Airlines and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Sligro Food.
Diversification Opportunities for United Airlines and Sligro Food
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and Sligro is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of United Airlines i.e., United Airlines and Sligro Food go up and down completely randomly.
Pair Corralation between United Airlines and Sligro Food
Considering the 90-day investment horizon United Airlines Holdings is expected to generate 1.09 times more return on investment than Sligro Food. However, United Airlines is 1.09 times more volatile than Sligro Food Group. It trades about 0.38 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.21 per unit of risk. If you would invest 7,449 in United Airlines Holdings on August 23, 2024 and sell it today you would earn a total of 2,014 from holding United Airlines Holdings or generate 27.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Airlines Holdings vs. Sligro Food Group
Performance |
| Timeline |
| United Airlines Holdings |
| Sligro Food Group |
United Airlines and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Sligro Food
The main advantage of trading using opposite United Airlines and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| United Airlines vs. Delta Air Lines | United Airlines vs. Southwest Airlines | United Airlines vs. JetBlue Airways Corp | United Airlines vs. Spirit Airlines |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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