Correlation Between United Airlines and TRI CHEMICAL
Can any of the company-specific risk be diversified away by investing in both United Airlines and TRI CHEMICAL 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 TRI CHEMICAL 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 TRI CHEMICAL LABORATINC, you can compare the effects of market volatilities on United Airlines and TRI CHEMICAL 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 TRI CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and TRI CHEMICAL.
Diversification Opportunities for United Airlines and TRI CHEMICAL
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and TRI is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and TRI CHEMICAL LABORATINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRI CHEMICAL LABORATINC 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 TRI CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRI CHEMICAL LABORATINC has no effect on the direction of United Airlines i.e., United Airlines and TRI CHEMICAL go up and down completely randomly.
Pair Corralation between United Airlines and TRI CHEMICAL
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 1.0 times more return on investment than TRI CHEMICAL. However, United Airlines Holdings is 1.0 times less risky than TRI CHEMICAL. It trades about 0.26 of its potential returns per unit of risk. TRI CHEMICAL LABORATINC is currently generating about 0.02 per unit of risk. If you would invest 6,836 in United Airlines Holdings on October 20, 2024 and sell it today you would earn a total of 3,634 from holding United Airlines Holdings or generate 53.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. TRI CHEMICAL LABORATINC
Performance |
| Timeline |
| United Airlines Holdings |
| TRI CHEMICAL LABORATINC |
United Airlines and TRI CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and TRI CHEMICAL
The main advantage of trading using opposite United Airlines and TRI CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, TRI CHEMICAL 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 TRI CHEMICAL will offset losses from the drop in TRI CHEMICAL's long position.| United Airlines vs. INDOFOOD AGRI RES | United Airlines vs. InPlay Oil Corp | United Airlines vs. Nomad Foods | United Airlines vs. Performance Food Group |
| TRI CHEMICAL vs. COFCO Joycome Foods | TRI CHEMICAL vs. Nomad Foods | TRI CHEMICAL vs. United Airlines Holdings | TRI CHEMICAL vs. Cal Maine Foods |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |