Correlation Between United Airlines and Pettenati
Can any of the company-specific risk be diversified away by investing in both United Airlines and Pettenati 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 Pettenati 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 Pettenati SA Industria, you can compare the effects of market volatilities on United Airlines and Pettenati 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 Pettenati. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Pettenati.
Diversification Opportunities for United Airlines and Pettenati
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Pettenati is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Pettenati SA Industria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pettenati SA Industria 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 Pettenati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pettenati SA Industria has no effect on the direction of United Airlines i.e., United Airlines and Pettenati go up and down completely randomly.
Pair Corralation between United Airlines and Pettenati
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 0.8 times more return on investment than Pettenati. However, United Airlines Holdings is 1.25 times less risky than Pettenati. It trades about 0.16 of its potential returns per unit of risk. Pettenati SA Industria is currently generating about -0.11 per unit of risk. If you would invest 30,780 in United Airlines Holdings on October 22, 2024 and sell it today you would earn a total of 1,840 from holding United Airlines Holdings or generate 5.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 94.44% |
Values | Daily Returns |
United Airlines Holdings vs. Pettenati SA Industria
Performance |
Timeline |
United Airlines Holdings |
Pettenati SA Industria |
United Airlines and Pettenati Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Airlines and Pettenati
The main advantage of trading using opposite United Airlines and Pettenati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Pettenati 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 Pettenati will offset losses from the drop in Pettenati's long position.United Airlines vs. Academy Sports and | United Airlines vs. Brpr Corporate Offices | United Airlines vs. Healthpeak Properties | United Airlines vs. The Home Depot |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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