Correlation Between United Airlines and G III
Can any of the company-specific risk be diversified away by investing in both United Airlines and G III 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 G III 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 G III Apparel Group, you can compare the effects of market volatilities on United Airlines and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and G III.
Diversification Opportunities for United Airlines and G III
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and GI4 is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of United Airlines i.e., United Airlines and G III go up and down completely randomly.
Pair Corralation between United Airlines and G III
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 1.2 times more return on investment than G III. However, United Airlines is 1.2 times more volatile than G III Apparel Group. It trades about 0.12 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.16 per unit of risk. If you would invest 9,700 in United Airlines Holdings on November 8, 2024 and sell it today you would earn a total of 658.00 from holding United Airlines Holdings or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Airlines Holdings vs. G III Apparel Group
Performance |
| Timeline |
| United Airlines Holdings |
| G III Apparel |
United Airlines and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and G III
The main advantage of trading using opposite United Airlines and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, G III 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 G III will offset losses from the drop in G III's long position.| United Airlines vs. Delta Air Lines | United Airlines vs. AIR CHINA LTD | United Airlines vs. RYANAIR HLDGS ADR | United Airlines vs. Southwest Airlines Co |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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