Correlation Between United Airlines and Schneider National
Can any of the company-specific risk be diversified away by investing in both United Airlines and Schneider National 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 Schneider National 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 Schneider National, you can compare the effects of market volatilities on United Airlines and Schneider National 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 Schneider National. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Schneider National.
Diversification Opportunities for United Airlines and Schneider National
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Schneider is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Schneider National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider National 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 Schneider National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schneider National has no effect on the direction of United Airlines i.e., United Airlines and Schneider National go up and down completely randomly.
Pair Corralation between United Airlines and Schneider National
Considering the 90-day investment horizon United Airlines Holdings is expected to generate 1.51 times more return on investment than Schneider National. However, United Airlines is 1.51 times more volatile than Schneider National. It trades about 0.07 of its potential returns per unit of risk. Schneider National is currently generating about 0.04 per unit of risk. If you would invest 4,592 in United Airlines Holdings on August 27, 2024 and sell it today you would earn a total of 4,932 from holding United Airlines Holdings or generate 107.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Schneider National
Performance |
| Timeline |
| United Airlines Holdings |
| Schneider National |
United Airlines and Schneider National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Schneider National
The main advantage of trading using opposite United Airlines and Schneider National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Schneider National 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 Schneider National will offset losses from the drop in Schneider National'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 |
| Schneider National vs. Marten Transport | Schneider National vs. Heartland Express | Schneider National vs. Universal Logistics Holdings | Schneider National vs. Covenant Logistics Group, |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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