Correlation Between Bayfirst Financial and United Airlines

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

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

Diversification Opportunities for Bayfirst Financial and United Airlines

-0.27

Correlation Coefficient

Bayfirst Financial  United Airlines

Very good diversification

The 3 months correlation between Bayfirst and United is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bayfirst Financial Corp 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 Bayfirst Financial 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 Bayfirst Financial Corp 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 Bayfirst Financial i.e., Bayfirst Financial and United Airlines go up and down completely randomly.

Pair Corralation between Bayfirst Financial and United Airlines

Given the investment horizon of 90 days Bayfirst Financial Corp is expected to under-perform the United Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Bayfirst Financial Corp is 1.1 times less risky than United Airlines. The stock trades about -0.09 of its potential returns per unit of risk. The United Airlines Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  7,486  in United Airlines Holdings on May 5, 2025 and sell it today you would earn a total of  971.00  from holding United Airlines Holdings or generate 12.97% return on investment over 90 days.

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

Bayfirst Financial Corp  vs.  United Airlines Holdings

Bayfirst Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bayfirst Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

United Airlines Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in United Airlines Holdings are ranked lower than 5 (%) 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 Bayfirst Financial and United Airlines

The main advantage of trading using opposite Bayfirst Financial and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayfirst Financial 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 Bayfirst Financial Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.