Correlation Between Internacional and United Airlines

Can any of the company-specific risk be diversified away by investing in both Internacional 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 Internacional and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Internacional de Cermica and United Airlines Holdings, you can compare the effects of market volatilities on Internacional 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 Internacional with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internacional and United Airlines.

Diversification Opportunities for Internacional and United Airlines

0.0

Correlation Coefficient

Internacional  United Airlines

Pay attention - limited upside

The 3 months correlation between Internacional and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Internacional de Cermica 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 Internacional 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 Internacional de Cermica 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 Internacional i.e., Internacional and United Airlines go up and down completely randomly.

Pair Corralation between Internacional and United Airlines

If you would invest  9,600  in Internacional de Cermica on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Internacional de Cermica or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Internacional de Cermica  vs.  United Airlines Holdings

Internacional de Cermica

Risk-Adjusted Performance

Very Weak

Over the last 90 days Internacional de Cermica has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Internacional is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

United Airlines Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Airlines Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, United Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Internacional and United Airlines

The main advantage of trading using opposite Internacional and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internacional 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.

The idea behind Internacional de Cermica and United Airlines Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.