Correlation Between United Airlines and CME
Can any of the company-specific risk be diversified away by investing in both United Airlines and CME 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 CME 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 CME Group, you can compare the effects of market volatilities on United Airlines and CME 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 CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and CME.
Diversification Opportunities for United Airlines and CME
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and CME is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and CME Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CME 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 CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CME Group has no effect on the direction of United Airlines i.e., United Airlines and CME go up and down completely randomly.
Pair Corralation between United Airlines and CME
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 3.06 times more return on investment than CME. However, United Airlines is 3.06 times more volatile than CME Group. It trades about 0.07 of its potential returns per unit of risk. CME Group is currently generating about 0.02 per unit of risk. If you would invest 9,597 in United Airlines Holdings on October 26, 2024 and sell it today you would earn a total of 341.00 from holding United Airlines Holdings or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
United Airlines Holdings vs. CME Group
Performance |
| Timeline |
| United Airlines Holdings |
| CME Group |
United Airlines and CME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and CME
The main advantage of trading using opposite United Airlines and CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, CME 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 CME will offset losses from the drop in CME's long position.| United Airlines vs. Delta Air Lines | United Airlines vs. Air China Limited | United Airlines vs. AIR CHINA LTD | United Airlines vs. RYANAIR HLDGS ADR |
| CME vs. United Airlines Holdings | CME vs. OPKO HEALTH | CME vs. EPSILON HEALTHCARE LTD | CME vs. National Health Investors |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |