Correlation Between United Airlines and INTERSHOP Communications
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By analyzing existing cross correlation between United Airlines Holdings and INTERSHOP Communications Aktiengesellschaft, you can compare the effects of market volatilities on United Airlines and INTERSHOP Communications 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 INTERSHOP Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and INTERSHOP Communications.
Diversification Opportunities for United Airlines and INTERSHOP Communications
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and INTERSHOP is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and INTERSHOP Communications Aktie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERSHOP Communications 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 INTERSHOP Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERSHOP Communications has no effect on the direction of United Airlines i.e., United Airlines and INTERSHOP Communications go up and down completely randomly.
Pair Corralation between United Airlines and INTERSHOP Communications
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 0.95 times more return on investment than INTERSHOP Communications. However, United Airlines Holdings is 1.05 times less risky than INTERSHOP Communications. It trades about 0.07 of its potential returns per unit of risk. INTERSHOP Communications Aktiengesellschaft is currently generating about -0.01 per unit of risk. If you would invest 4,180 in United Airlines Holdings on August 26, 2024 and sell it today you would earn a total of 4,804 from holding United Airlines Holdings or generate 114.93% 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. INTERSHOP Communications Aktie
Performance |
| Timeline |
| United Airlines Holdings |
| INTERSHOP Communications |
United Airlines and INTERSHOP Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and INTERSHOP Communications
The main advantage of trading using opposite United Airlines and INTERSHOP Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, INTERSHOP Communications 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 INTERSHOP Communications will offset losses from the drop in INTERSHOP Communications' long position.The idea behind United Airlines Holdings and INTERSHOP Communications Aktiengesellschaft 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.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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