Correlation Between United Airlines and SAFETY MEDICAL
Can any of the company-specific risk be diversified away by investing in both United Airlines and SAFETY MEDICAL 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 SAFETY MEDICAL 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 SAFETY MEDICAL PROD, you can compare the effects of market volatilities on United Airlines and SAFETY MEDICAL 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 SAFETY MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and SAFETY MEDICAL.
Diversification Opportunities for United Airlines and SAFETY MEDICAL
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and SAFETY is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and SAFETY MEDICAL PROD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAFETY MEDICAL PROD 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 SAFETY MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAFETY MEDICAL PROD has no effect on the direction of United Airlines i.e., United Airlines and SAFETY MEDICAL go up and down completely randomly.
Pair Corralation between United Airlines and SAFETY MEDICAL
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 1.3 times more return on investment than SAFETY MEDICAL. However, United Airlines is 1.3 times more volatile than SAFETY MEDICAL PROD. It trades about 0.21 of its potential returns per unit of risk. SAFETY MEDICAL PROD is currently generating about -0.35 per unit of risk. If you would invest 8,200 in United Airlines Holdings on September 12, 2024 and sell it today you would earn a total of 1,096 from holding United Airlines Holdings or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Airlines Holdings vs. SAFETY MEDICAL PROD
Performance |
| Timeline |
| United Airlines Holdings |
| SAFETY MEDICAL PROD |
United Airlines and SAFETY MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and SAFETY MEDICAL
The main advantage of trading using opposite United Airlines and SAFETY MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, SAFETY MEDICAL 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 SAFETY MEDICAL will offset losses from the drop in SAFETY MEDICAL's long position.| United Airlines vs. Zijin Mining Group | United Airlines vs. Highlight Communications AG | United Airlines vs. Grupo Carso SAB | United Airlines vs. GEELY AUTOMOBILE |
| SAFETY MEDICAL vs. Apple Inc | SAFETY MEDICAL vs. Apple Inc | SAFETY MEDICAL vs. Apple Inc | SAFETY MEDICAL vs. Apple Inc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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