Correlation Between Zegona Communications and United Airlines
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and United Airlines 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 Zegona Communications and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zegona Communications Plc and United Airlines Holdings, you can compare the effects of market volatilities on Zegona Communications and United Airlines 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 Zegona Communications with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and United Airlines.
Diversification Opportunities for Zegona Communications and United Airlines
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zegona and United is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings and Zegona Communications 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 Zegona Communications Plc are associated (or correlated) with United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of Zegona Communications i.e., Zegona Communications and United Airlines go up and down completely randomly.
Pair Corralation between Zegona Communications and United Airlines
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 6.67 times more return on investment than United Airlines. However, Zegona Communications is 6.67 times more volatile than United Airlines Holdings. It trades about 0.05 of its potential returns per unit of risk. United Airlines Holdings is currently generating about 0.08 per unit of risk. If you would invest 7,750 in Zegona Communications Plc on August 31, 2024 and sell it today you would earn a total of 27,450 from holding Zegona Communications Plc or generate 354.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.74% |
| Values | Daily Returns |
Zegona Communications Plc vs. United Airlines Holdings
Performance |
| Timeline |
| Zegona Communications Plc |
| United Airlines Holdings |
Zegona Communications and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and United Airlines
The main advantage of trading using opposite Zegona Communications and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, United Airlines 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 United Airlines will offset losses from the drop in United Airlines' long position.| Zegona Communications vs. Toyota Motor Corp | Zegona Communications vs. SoftBank Group Corp | Zegona Communications vs. OTP Bank Nyrt | Zegona Communications vs. Las Vegas Sands |
| United Airlines vs. Neometals | United Airlines vs. Coor Service Management | United Airlines vs. Aeorema Communications Plc | United Airlines vs. JLEN Environmental Assets |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |