Correlation Between Unlimited Travel and ABB

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Unlimited Travel and ABB 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 Unlimited Travel and ABB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unlimited Travel Group and ABB, you can compare the effects of market volatilities on Unlimited Travel and ABB 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 Unlimited Travel with a short position of ABB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unlimited Travel and ABB.

Diversification Opportunities for Unlimited Travel and ABB

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Unlimited and ABB is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Unlimited Travel Group and ABB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABB and Unlimited Travel 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 Unlimited Travel Group are associated (or correlated) with ABB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABB has no effect on the direction of Unlimited Travel i.e., Unlimited Travel and ABB go up and down completely randomly.

Pair Corralation between Unlimited Travel and ABB

Assuming the 90 days trading horizon Unlimited Travel is expected to generate 2.05 times less return on investment than ABB. In addition to that, Unlimited Travel is 1.54 times more volatile than ABB. It trades about 0.05 of its total potential returns per unit of risk. ABB is currently generating about 0.16 per unit of volatility. If you would invest  59,820  in ABB on September 3, 2024 and sell it today you would earn a total of  2,140  from holding ABB or generate 3.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Unlimited Travel Group  vs.  ABB

 Performance 
       Timeline  
Unlimited Travel 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Unlimited Travel Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Unlimited Travel may actually be approaching a critical reversion point that can send shares even higher in January 2025.
ABB 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in ABB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, ABB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Unlimited Travel and ABB Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Unlimited Travel and ABB

The main advantage of trading using opposite Unlimited Travel and ABB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unlimited Travel position performs unexpectedly, ABB 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 ABB will offset losses from the drop in ABB's long position.
The idea behind Unlimited Travel Group and ABB 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins