Correlation Between United Airlines and Apyx Medical
Can any of the company-specific risk be diversified away by investing in both United Airlines and Apyx Medical 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 Apyx Medical 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 Apyx Medical Corp, you can compare the effects of market volatilities on United Airlines and Apyx Medical 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 Apyx Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Apyx Medical.
Diversification Opportunities for United Airlines and Apyx Medical
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and Apyx is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Apyx Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apyx Medical 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 Apyx Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apyx Medical Corp has no effect on the direction of United Airlines i.e., United Airlines and Apyx Medical go up and down completely randomly.
Pair Corralation between United Airlines and Apyx Medical
Assuming the 90 days trading horizon United Airlines is expected to generate 1.09 times less return on investment than Apyx Medical. But when comparing it to its historical volatility, United Airlines Holdings is 1.95 times less risky than Apyx Medical. It trades about 0.41 of its potential returns per unit of risk. Apyx Medical Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 102.00 in Apyx Medical Corp on August 25, 2024 and sell it today you would earn a total of 33.00 from holding Apyx Medical Corp or generate 32.35% 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. Apyx Medical Corp
Performance |
| Timeline |
| United Airlines Holdings |
| Apyx Medical Corp |
United Airlines and Apyx Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Apyx Medical
The main advantage of trading using opposite United Airlines and Apyx Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Apyx Medical 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 Apyx Medical will offset losses from the drop in Apyx Medical's long position.The idea behind United Airlines Holdings and Apyx Medical Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Apyx Medical vs. Apple Inc | Apyx Medical vs. Apple Inc | Apyx Medical vs. Apple Inc | Apyx Medical vs. Apple Inc |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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