Correlation Between United Airlines and Nemak S

Can any of the company-specific risk be diversified away by investing in both United Airlines and Nemak S 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 Nemak S 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 Nemak S A, you can compare the effects of market volatilities on United Airlines and Nemak S 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 Nemak S. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Nemak S.

Diversification Opportunities for United Airlines and Nemak S

-0.7

Correlation Coefficient

United Airlines  Nemak S

Excellent diversification

The 3 months correlation between United and Nemak is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Nemak S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nemak S A 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 Nemak S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nemak S A has no effect on the direction of United Airlines i.e., United Airlines and Nemak S go up and down completely randomly.

Pair Corralation between United Airlines and Nemak S

Assuming the 90 days trading horizon United Airlines Holdings is expected to under-perform the Nemak S. But the stock apears to be less risky and, when comparing its historical volatility, United Airlines Holdings is 1.06 times less risky than Nemak S. The stock trades about -0.12 of its potential returns per unit of risk. The Nemak S A is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  273.00  in Nemak S A on December 22, 2024 and sell it today you would lose (12.00) from holding Nemak S A or give up 4.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

United Airlines Holdings  vs.  Nemak S A

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 unfluctuating performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Nemak S A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nemak S A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Nemak S is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with United Airlines and Nemak S

The main advantage of trading using opposite United Airlines and Nemak S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Nemak S 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 Nemak S will offset losses from the drop in Nemak S's long position.

The idea behind United Airlines Holdings and Nemak S A 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.