Correlation Between United Airlines and VIVA WINE
Can any of the company-specific risk be diversified away by investing in both United Airlines and VIVA WINE 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 VIVA WINE 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 VIVA WINE GROUP, you can compare the effects of market volatilities on United Airlines and VIVA WINE 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 VIVA WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and VIVA WINE.
Diversification Opportunities for United Airlines and VIVA WINE
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and VIVA is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and VIVA WINE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVA WINE GROUP 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 VIVA WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVA WINE GROUP has no effect on the direction of United Airlines i.e., United Airlines and VIVA WINE go up and down completely randomly.
Pair Corralation between United Airlines and VIVA WINE
Assuming the 90 days trading horizon United Airlines Holdings is expected to under-perform the VIVA WINE. In addition to that, United Airlines is 2.02 times more volatile than VIVA WINE GROUP. It trades about 0.0 of its total potential returns per unit of risk. VIVA WINE GROUP is currently generating about 0.18 per unit of volatility. If you would invest 322.00 in VIVA WINE GROUP on November 30, 2024 and sell it today you would earn a total of 39.00 from holding VIVA WINE GROUP or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
United Airlines Holdings vs. VIVA WINE GROUP
Performance |
| Timeline |
| United Airlines Holdings |
| VIVA WINE GROUP |
United Airlines and VIVA WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and VIVA WINE
The main advantage of trading using opposite United Airlines and VIVA WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, VIVA WINE 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 VIVA WINE will offset losses from the drop in VIVA WINE's long position.| United Airlines vs. National Health Investors | United Airlines vs. Planet Fitness | United Airlines vs. MPH Health Care | United Airlines vs. CARDINAL HEALTH |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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