Correlation Between United Airlines and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both United Airlines and Weibo Corp 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 Weibo Corp 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 Weibo Corp, you can compare the effects of market volatilities on United Airlines and Weibo Corp 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 Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Weibo Corp.
Diversification Opportunities for United Airlines and Weibo Corp
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and Weibo is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo 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 Weibo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weibo Corp has no effect on the direction of United Airlines i.e., United Airlines and Weibo Corp go up and down completely randomly.
Pair Corralation between United Airlines and Weibo Corp
Considering the 90-day investment horizon United Airlines Holdings is expected to generate 0.87 times more return on investment than Weibo Corp. However, United Airlines Holdings is 1.15 times less risky than Weibo Corp. It trades about 0.34 of its potential returns per unit of risk. Weibo Corp is currently generating about 0.12 per unit of risk. If you would invest 8,046 in United Airlines Holdings on September 2, 2024 and sell it today you would earn a total of 1,637 from holding United Airlines Holdings or generate 20.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Weibo Corp
Performance |
| Timeline |
| United Airlines Holdings |
| Weibo Corp |
United Airlines and Weibo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Weibo Corp
The main advantage of trading using opposite United Airlines and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Weibo Corp 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 Weibo Corp will offset losses from the drop in Weibo Corp'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 |
| Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |