Correlation Between United Airlines and Ggtoor

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

Diversification Opportunities for United Airlines and Ggtoor

0.37

Correlation Coefficient

United Airlines  Ggtoor

Weak diversification

The 3 months correlation between United and Ggtoor is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Ggtoor Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ggtoor Inc 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 Ggtoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ggtoor Inc has no effect on the direction of United Airlines i.e., United Airlines and Ggtoor go up and down completely randomly.

Pair Corralation between United Airlines and Ggtoor

Considering the 90-day investment horizon United Airlines is expected to generate 10.89 times less return on investment than Ggtoor. But when comparing it to its historical volatility, United Airlines Holdings is 23.5 times less risky than Ggtoor. It trades about 0.14 of its potential returns per unit of risk. Ggtoor Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.25  in Ggtoor Inc on September 12, 2024 and sell it today you would lose (0.24) from holding Ggtoor Inc or give up 96.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

United Airlines Holdings  vs.  Ggtoor Inc

United Airlines Holdings

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in United Airlines Holdings are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, United Airlines disclosed solid returns over the last few months and may actually be approaching a breakup point.

Ggtoor Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ggtoor Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ggtoor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United Airlines and Ggtoor

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

The idea behind United Airlines Holdings and Ggtoor Inc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.