Correlation Between United Airlines and Firan Technology
Can any of the company-specific risk be diversified away by investing in both United Airlines and Firan Technology 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 Firan Technology 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 Firan Technology Group, you can compare the effects of market volatilities on United Airlines and Firan Technology 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 Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Firan Technology.
Diversification Opportunities for United Airlines and Firan Technology
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Firan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology 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 Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of United Airlines i.e., United Airlines and Firan Technology go up and down completely randomly.
Pair Corralation between United Airlines and Firan Technology
Assuming the 90 days trading horizon United Airlines is expected to generate 1.12 times less return on investment than Firan Technology. In addition to that, United Airlines is 1.57 times more volatile than Firan Technology Group. It trades about 0.16 of its total potential returns per unit of risk. Firan Technology Group is currently generating about 0.28 per unit of volatility. If you would invest 478.00 in Firan Technology Group on November 5, 2024 and sell it today you would earn a total of 52.00 from holding Firan Technology Group or generate 10.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Firan Technology Group
Performance |
| Timeline |
| United Airlines Holdings |
| Firan Technology |
United Airlines and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Firan Technology
The main advantage of trading using opposite United Airlines and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Firan Technology 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 Firan Technology will offset losses from the drop in Firan Technology's long position.| United Airlines vs. Geely Automobile Holdings | United Airlines vs. VELA TECHNOLPLC LS 0001 | United Airlines vs. Kingdee International Software | United Airlines vs. ASPEN TECHINC DL |
| Firan Technology vs. GameStop Corp | Firan Technology vs. National Retail Properties | Firan Technology vs. FAST RETAIL ADR | Firan Technology vs. TRADEDOUBLER AB SK |
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.
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