Correlation Between United Airlines and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both United Airlines and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on United Airlines and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and ELMOS SEMICONDUCTOR.
Diversification Opportunities for United Airlines and ELMOS SEMICONDUCTOR
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and ELMOS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELMOS SEMICONDUCTOR has no effect on the direction of United Airlines i.e., United Airlines and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between United Airlines and ELMOS SEMICONDUCTOR
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 0.92 times more return on investment than ELMOS SEMICONDUCTOR. However, United Airlines Holdings is 1.08 times less risky than ELMOS SEMICONDUCTOR. It trades about 0.08 of its potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about 0.01 per unit of risk. If you would invest 4,616 in United Airlines Holdings on November 6, 2024 and sell it today you would earn a total of 5,920 from holding United Airlines Holdings or generate 128.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. ELMOS SEMICONDUCTOR
Performance |
| Timeline |
| United Airlines Holdings |
| ELMOS SEMICONDUCTOR |
United Airlines and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite United Airlines and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR will offset losses from the drop in ELMOS SEMICONDUCTOR's long position.| United Airlines vs. MCEWEN MINING INC | United Airlines vs. ARDAGH METAL PACDL 0001 | United Airlines vs. Thai Beverage Public | United Airlines vs. Jacquet Metal Service |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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