Correlation Between United Airlines and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both United Airlines and Yuexiu Transport 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 Yuexiu Transport 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 Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on United Airlines and Yuexiu Transport 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 Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Yuexiu Transport.
Diversification Opportunities for United Airlines and Yuexiu Transport
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and Yuexiu is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf 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 Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of United Airlines i.e., United Airlines and Yuexiu Transport go up and down completely randomly.
Pair Corralation between United Airlines and Yuexiu Transport
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 1.29 times more return on investment than Yuexiu Transport. However, United Airlines is 1.29 times more volatile than Yuexiu Transport Infrastructure. It trades about 0.11 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.14 per unit of risk. If you would invest 9,296 in United Airlines Holdings on October 11, 2024 and sell it today you would earn a total of 404.00 from holding United Airlines Holdings or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| United Airlines Holdings |
| Yuexiu Transport Inf |
United Airlines and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Yuexiu Transport
The main advantage of trading using opposite United Airlines and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.| United Airlines vs. Comba Telecom Systems | United Airlines vs. Highlight Communications AG | United Airlines vs. GAMING FAC SA | United Airlines vs. INTERSHOP Communications Aktiengesellschaft |
| Yuexiu Transport vs. INTERSHOP Communications Aktiengesellschaft | Yuexiu Transport vs. ecotel communication ag | Yuexiu Transport vs. United Airlines Holdings | Yuexiu Transport vs. THAI BEVERAGE |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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