Correlation Between United Airlines and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both United Airlines and Goldman Sachs 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 Goldman Sachs 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 The Goldman Sachs, you can compare the effects of market volatilities on United Airlines and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Goldman Sachs.
Diversification Opportunities for United Airlines and Goldman Sachs
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Goldman is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs has no effect on the direction of United Airlines i.e., United Airlines and Goldman Sachs go up and down completely randomly.
Pair Corralation between United Airlines and Goldman Sachs
Assuming the 90 days trading horizon United Airlines is expected to generate 2.26 times less return on investment than Goldman Sachs. In addition to that, United Airlines is 1.81 times more volatile than The Goldman Sachs. It trades about 0.01 of its total potential returns per unit of risk. The Goldman Sachs is currently generating about 0.04 per unit of volatility. If you would invest 57,092 in The Goldman Sachs on December 3, 2024 and sell it today you would earn a total of 1,918 from holding The Goldman Sachs or generate 3.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
United Airlines Holdings vs. The Goldman Sachs
Performance |
Timeline |
United Airlines Holdings |
Goldman Sachs |
United Airlines and Goldman Sachs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Airlines and Goldman Sachs
The main advantage of trading using opposite United Airlines and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.United Airlines vs. GLG LIFE TECH | United Airlines vs. betterU Education Corp | United Airlines vs. CHINA EDUCATION GROUP | United Airlines vs. EEDUCATION ALBERT AB |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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