Correlation Between 04686E2U5 and United Airlines

Can any of the company-specific risk be diversified away by investing in both 04686E2U5 and United Airlines 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 04686E2U5 and United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATH 255 19 NOV 30 and United Airlines Holdings, you can compare the effects of market volatilities on 04686E2U5 and United Airlines 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 04686E2U5 with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of 04686E2U5 and United Airlines.

Diversification Opportunities for 04686E2U5 and United Airlines

0.62

Correlation Coefficient

04686E2U5  United Airlines

Poor diversification

The 3 months correlation between 04686E2U5 and United is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ATH 255 19 NOV 30 and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings and 04686E2U5 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 ATH 255 19 NOV 30 are associated (or correlated) with United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of 04686E2U5 i.e., 04686E2U5 and United Airlines go up and down completely randomly.

Pair Corralation between 04686E2U5 and United Airlines

Assuming the 90 days trading horizon 04686E2U5 is expected to generate 14.41 times less return on investment than United Airlines. But when comparing it to its historical volatility, ATH 255 19 NOV 30 is 1.35 times less risky than United Airlines. It trades about 0.01 of its potential returns per unit of risk. United Airlines Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,972  in United Airlines Holdings on September 25, 2024 and sell it today you would earn a total of  5,976  from holding United Airlines Holdings or generate 150.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	27.82%
Values	Daily Returns

ATH 255 19 NOV 30  vs.  United Airlines Holdings

ATH 255 19

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATH 255 19 NOV 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for ATH 255 19 NOV 30 investors.

United Airlines Holdings

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in United Airlines Holdings are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, United Airlines disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 04686E2U5 and United Airlines

The main advantage of trading using opposite 04686E2U5 and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 04686E2U5 position performs unexpectedly, United Airlines 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 United Airlines will offset losses from the drop in United Airlines' long position.

The idea behind ATH 255 19 NOV 30 and United Airlines Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.