Correlation Between Wheels Up and Corporacion America

Can any of the company-specific risk be diversified away by investing in both Wheels Up and Corporacion America 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 Wheels Up and Corporacion America into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wheels Up Experience and Corporacion America Airports, you can compare the effects of market volatilities on Wheels Up and Corporacion America 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 Wheels Up with a short position of Corporacion America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheels Up and Corporacion America.

Diversification Opportunities for Wheels Up and Corporacion America

-0.28

Correlation Coefficient

Wheels Up  Corporacion America

Very good diversification

The 3 months correlation between Wheels and Corporacion is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Wheels Up Experience and Corporacion America Airports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacion America and Wheels Up 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 Wheels Up Experience are associated (or correlated) with Corporacion America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacion America has no effect on the direction of Wheels Up i.e., Wheels Up and Corporacion America go up and down completely randomly.

Pair Corralation between Wheels Up and Corporacion America

Allowing for the 90-day total investment horizon Wheels Up Experience is expected to under-perform the Corporacion America. In addition to that, Wheels Up is 2.23 times more volatile than Corporacion America Airports. It trades about -0.07 of its total potential returns per unit of risk. Corporacion America Airports is currently generating about 0.05 per unit of volatility. If you would invest  1,799  in Corporacion America Airports on September 27, 2024 and sell it today you would earn a total of  100.00  from holding Corporacion America Airports or generate 5.56% return on investment over 90 days.

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

Wheels Up Experience  vs.  Corporacion America Airports

Wheels Up Experience

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wheels Up Experience has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Corporacion America

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Corporacion America Airports are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Corporacion America may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Wheels Up and Corporacion America

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

The idea behind Wheels Up Experience and Corporacion America Airports 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.