Correlation Between United Airlines and Zencash Investment

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

Diversification Opportunities for United Airlines and Zencash Investment

0.61

Correlation Coefficient

United Airlines  Zencash Investment

Poor diversification

The 3 months correlation between United and Zencash is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Zencash Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zencash Investment Trust 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 Zencash Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zencash Investment Trust has no effect on the direction of United Airlines i.e., United Airlines and Zencash Investment go up and down completely randomly.

Pair Corralation between United Airlines and Zencash Investment

Considering the 90-day investment horizon United Airlines Holdings is expected to generate 0.34 times more return on investment than Zencash Investment. However, United Airlines Holdings is 2.96 times less risky than Zencash Investment. It trades about 0.34 of its potential returns per unit of risk. Zencash Investment Trust is currently generating about 0.1 per unit of risk. If you would invest  5,236  in United Airlines Holdings on September 21, 2024 and sell it today you would earn a total of  4,504  from holding United Airlines Holdings or generate 86.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

United Airlines Holdings  vs.  Zencash Investment Trust

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 conflicting basic indicators, United Airlines disclosed solid returns over the last few months and may actually be approaching a breakup point.

Zencash Investment Trust

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zencash Investment Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Zencash Investment displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United Airlines and Zencash Investment

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

The idea behind United Airlines Holdings and Zencash Investment Trust 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.