Correlation Between United Airlines and Ihuman

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

Diversification Opportunities for United Airlines and Ihuman

-0.37

Correlation Coefficient

United Airlines  Ihuman

Very good diversification

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

Pair Corralation between United Airlines and Ihuman

Considering the 90-day investment horizon United Airlines Holdings is expected to generate 0.72 times more return on investment than Ihuman. However, United Airlines Holdings is 1.39 times less risky than Ihuman. It trades about 0.35 of its potential returns per unit of risk. Ihuman Inc is currently generating about 0.06 per unit of risk. If you would invest  5,134  in United Airlines Holdings on September 16, 2024 and sell it today you would earn a total of  4,377  from holding United Airlines Holdings or generate 85.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

United Airlines Holdings  vs.  Ihuman Inc

United Airlines Holdings

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in United Airlines Holdings are ranked lower than 27 (%) 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.

Ihuman Inc

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with United Airlines and Ihuman

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

The idea behind United Airlines Holdings and Ihuman 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.