Correlation Between United Airlines and Wix
Can any of the company-specific risk be diversified away by investing in both United Airlines and Wix 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 Wix 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 Wix, you can compare the effects of market volatilities on United Airlines and Wix 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 Wix. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Wix.
Diversification Opportunities for United Airlines and Wix
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Wix is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Wix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wix 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 Wix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wix has no effect on the direction of United Airlines i.e., United Airlines and Wix go up and down completely randomly.
Pair Corralation between United Airlines and Wix
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 0.84 times more return on investment than Wix. However, United Airlines Holdings is 1.18 times less risky than Wix. It trades about -0.03 of its potential returns per unit of risk. Wix is currently generating about -0.06 per unit of risk. If you would invest 29,280 in United Airlines Holdings on December 3, 2024 and sell it today you would lose (1,801) from holding United Airlines Holdings or give up 6.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
United Airlines Holdings vs. Wix
Performance |
Timeline |
United Airlines Holdings |
Wix |
United Airlines and Wix Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Airlines and Wix
The main advantage of trading using opposite United Airlines and Wix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Wix 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 Wix will offset losses from the drop in Wix's long position.United Airlines vs. Annaly Capital Management, | United Airlines vs. TAL Education Group | United Airlines vs. Pure Storage, | United Airlines vs. Fidelity National Information |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Stocks Directory Find actively traded stocks across global markets |