Correlation Between Daseke and United Airlines

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

By analyzing existing cross correlation between Daseke Inc and United Airlines Holdings, you can compare the effects of market volatilities on Daseke and United Airlines 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 Daseke with a short position of United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daseke and United Airlines.

Diversification Opportunities for Daseke and United Airlines

0.62

Correlation Coefficient

Daseke  United Airlines

Poor diversification

The 3 months correlation between Daseke and United is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Daseke Inc and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings and Daseke 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 Daseke Inc are associated (or correlated) with United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of Daseke i.e., Daseke and United Airlines go up and down completely randomly.

Pair Corralation between Daseke and United Airlines

Given the investment horizon of 90 days Daseke Inc is expected to generate 1.92 times more return on investment than United Airlines. However, Daseke is 1.92 times more volatile than United Airlines Holdings. It trades about 0.03 of its potential returns per unit of risk. United Airlines Holdings is currently generating about 0.01 per unit of risk. If you would invest  745.00  in Daseke Inc on January 28, 2024 and sell it today you would earn a total of  84.00  from holding Daseke Inc or generate 11.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.19%
Values	Daily Returns

Daseke Inc  vs.  United Airlines Holdings

Daseke Inc

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Daseke Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, Daseke is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

United Airlines Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United Airlines Holdings are ranked lower than 10 (%) 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.

Pair Trading with Daseke and United Airlines

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

The idea behind Daseke Inc and United Airlines Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.