Correlation Between United Airlines and PDS Biotechnology
Can any of the company-specific risk be diversified away by investing in both United Airlines and PDS Biotechnology 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 PDS Biotechnology 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 PDS Biotechnology Corp, you can compare the effects of market volatilities on United Airlines and PDS Biotechnology 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 PDS Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and PDS Biotechnology.
Diversification Opportunities for United Airlines and PDS Biotechnology
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and PDS is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and PDS Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDS Biotechnology 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 PDS Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDS Biotechnology Corp has no effect on the direction of United Airlines i.e., United Airlines and PDS Biotechnology go up and down completely randomly.
Pair Corralation between United Airlines and PDS Biotechnology
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 0.51 times more return on investment than PDS Biotechnology. However, United Airlines Holdings is 1.95 times less risky than PDS Biotechnology. It trades about 0.07 of its potential returns per unit of risk. PDS Biotechnology Corp is currently generating about -0.04 per unit of risk. If you would invest 4,581 in United Airlines Holdings on October 11, 2024 and sell it today you would earn a total of 5,080 from holding United Airlines Holdings or generate 110.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. PDS Biotechnology Corp
Performance |
| Timeline |
| United Airlines Holdings |
| PDS Biotechnology Corp |
United Airlines and PDS Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and PDS Biotechnology
The main advantage of trading using opposite United Airlines and PDS Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, PDS Biotechnology 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 PDS Biotechnology will offset losses from the drop in PDS Biotechnology's long position.| United Airlines vs. Mitsui Chemicals | United Airlines vs. SOEDER SPORTFISKE AB | United Airlines vs. KINGBOARD CHEMICAL | United Airlines vs. Air Transport Services |
| PDS Biotechnology vs. NorAm Drilling AS | PDS Biotechnology vs. Zijin Mining Group | PDS Biotechnology vs. MAGNUM MINING EXP | PDS Biotechnology vs. GRIFFIN MINING LTD |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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