Correlation Between United Airlines and Xylem
Can any of the company-specific risk be diversified away by investing in both United Airlines and Xylem 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 Xylem 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 Xylem Inc, you can compare the effects of market volatilities on United Airlines and Xylem 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 Xylem. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Xylem.
Diversification Opportunities for United Airlines and Xylem
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Xylem is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Xylem Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xylem 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 Xylem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xylem Inc has no effect on the direction of United Airlines i.e., United Airlines and Xylem go up and down completely randomly.
Pair Corralation between United Airlines and Xylem
Considering the 90-day investment horizon United Airlines Holdings is expected to under-perform the Xylem. In addition to that, United Airlines is 2.66 times more volatile than Xylem Inc. It trades about 0.0 of its total potential returns per unit of risk. Xylem Inc is currently generating about 0.02 per unit of volatility. If you would invest 13,964 in Xylem Inc on September 6, 2025 and sell it today you would earn a total of 123.00 from holding Xylem Inc or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Xylem Inc
Performance |
| Timeline |
| United Airlines Holdings |
| Xylem Inc |
United Airlines and Xylem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Xylem
The main advantage of trading using opposite United Airlines and Xylem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Xylem 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 Xylem will offset losses from the drop in Xylem's long position.| United Airlines vs. Infrastrutture Wireless Italiane | United Airlines vs. Quality One Wireless | United Airlines vs. Franklin Wireless Corp | United Airlines vs. Airborne Wireless Network |
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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.
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