Correlation Between United Airlines and Sandfire Resources
Can any of the company-specific risk be diversified away by investing in both United Airlines and Sandfire Resources 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 Sandfire Resources 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 Sandfire Resources Limited, you can compare the effects of market volatilities on United Airlines and Sandfire Resources 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 Sandfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Sandfire Resources.
Diversification Opportunities for United Airlines and Sandfire Resources
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Sandfire is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Sandfire Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandfire Resources 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 Sandfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandfire Resources has no effect on the direction of United Airlines i.e., United Airlines and Sandfire Resources go up and down completely randomly.
Pair Corralation between United Airlines and Sandfire Resources
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 1.45 times more return on investment than Sandfire Resources. However, United Airlines is 1.45 times more volatile than Sandfire Resources Limited. It trades about 0.18 of its potential returns per unit of risk. Sandfire Resources Limited is currently generating about -0.14 per unit of risk. If you would invest 8,200 in United Airlines Holdings on October 11, 2024 and sell it today you would earn a total of 1,500 from holding United Airlines Holdings or generate 18.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.44% |
| Values | Daily Returns |
United Airlines Holdings vs. Sandfire Resources Limited
Performance |
| Timeline |
| United Airlines Holdings |
| Sandfire Resources |
United Airlines and Sandfire Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Sandfire Resources
The main advantage of trading using opposite United Airlines and Sandfire Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Sandfire Resources 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 Sandfire Resources will offset losses from the drop in Sandfire Resources' 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 |
| Sandfire Resources vs. Charter Communications | Sandfire Resources vs. Commercial Vehicle Group | Sandfire Resources vs. Entravision Communications | Sandfire Resources vs. CARSALESCOM |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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