Correlation Between United Airlines and BOSTON BEER
Can any of the company-specific risk be diversified away by investing in both United Airlines and BOSTON BEER 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 BOSTON BEER 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 BOSTON BEER A , you can compare the effects of market volatilities on United Airlines and BOSTON BEER 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 BOSTON BEER. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and BOSTON BEER.
Diversification Opportunities for United Airlines and BOSTON BEER
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and BOSTON is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and BOSTON BEER A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOSTON BEER A 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 BOSTON BEER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOSTON BEER A has no effect on the direction of United Airlines i.e., United Airlines and BOSTON BEER go up and down completely randomly.
Pair Corralation between United Airlines and BOSTON BEER
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 1.65 times more return on investment than BOSTON BEER. However, United Airlines is 1.65 times more volatile than BOSTON BEER A . It trades about 0.31 of its potential returns per unit of risk. BOSTON BEER A is currently generating about 0.0 per unit of risk. If you would invest 3,589 in United Airlines Holdings on November 4, 2024 and sell it today you would earn a total of 6,717 from holding United Airlines Holdings or generate 187.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. BOSTON BEER A
Performance |
| Timeline |
| United Airlines Holdings |
| BOSTON BEER A |
United Airlines and BOSTON BEER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and BOSTON BEER
The main advantage of trading using opposite United Airlines and BOSTON BEER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, BOSTON BEER 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 BOSTON BEER will offset losses from the drop in BOSTON BEER's long position.| United Airlines vs. UNIVERSAL MUSIC GROUP | United Airlines vs. Nippon Steel | United Airlines vs. Zoom Video Communications | United Airlines vs. United States Steel |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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