Correlation Between United Airlines and ODYSSEY GOLD

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

Diversification Opportunities for United Airlines and ODYSSEY GOLD

-0.42

Correlation Coefficient

United Airlines  ODYSSEY GOLD

Very good diversification

The 3 months correlation between United and ODYSSEY is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and ODYSSEY GOLD LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODYSSEY GOLD LTD 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 ODYSSEY GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODYSSEY GOLD LTD has no effect on the direction of United Airlines i.e., United Airlines and ODYSSEY GOLD go up and down completely randomly.

Pair Corralation between United Airlines and ODYSSEY GOLD

Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 0.21 times more return on investment than ODYSSEY GOLD. However, United Airlines Holdings is 4.67 times less risky than ODYSSEY GOLD. It trades about -0.11 of its potential returns per unit of risk. ODYSSEY GOLD LTD is currently generating about -0.02 per unit of risk. If you would invest  9,530  in United Airlines Holdings on October 9, 2024 and sell it today you would lose (364.00) from holding United Airlines Holdings or give up 3.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

United Airlines Holdings  vs.  ODYSSEY GOLD LTD

United Airlines Holdings

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in United Airlines Holdings are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain essential indicators, United Airlines reported solid returns over the last few months and may actually be approaching a breakup point.

ODYSSEY GOLD LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ODYSSEY GOLD LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with United Airlines and ODYSSEY GOLD

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

The idea behind United Airlines Holdings and ODYSSEY GOLD LTD 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.