Correlation Between Southwest Airlines and Alior Bank
Can any of the company-specific risk be diversified away by investing in both Southwest Airlines and Alior Bank 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 Southwest Airlines and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwest Airlines Co and Alior Bank SA, you can compare the effects of market volatilities on Southwest Airlines and Alior Bank 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 Southwest Airlines with a short position of Alior Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and Alior Bank.
Diversification Opportunities for Southwest Airlines and Alior Bank
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Southwest and Alior is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines Co and Alior Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alior Bank SA and Southwest 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 Southwest Airlines Co are associated (or correlated) with Alior Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alior Bank SA has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and Alior Bank go up and down completely randomly.
Pair Corralation between Southwest Airlines and Alior Bank
Assuming the 90 days trading horizon Southwest Airlines Co is expected to generate 2.53 times more return on investment than Alior Bank. However, Southwest Airlines is 2.53 times more volatile than Alior Bank SA. It trades about 0.0 of its potential returns per unit of risk. Alior Bank SA is currently generating about 0.0 per unit of risk. If you would invest 3,565 in Southwest Airlines Co on September 3, 2024 and sell it today you would lose (313.00) from holding Southwest Airlines Co or give up 8.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Southwest Airlines Co vs. Alior Bank SA
Performance |
| Timeline |
| Southwest Airlines |
| Alior Bank SA |
Southwest Airlines and Alior Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and Alior Bank
The main advantage of trading using opposite Southwest Airlines and Alior Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, Alior Bank 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 Alior Bank will offset losses from the drop in Alior Bank's long position.| Southwest Airlines vs. Ameriprise Financial | Southwest Airlines vs. MT Bank Corp | Southwest Airlines vs. Playtech Plc | Southwest Airlines vs. Uber Technologies |
| Alior Bank vs. Endeavour Mining Corp | Alior Bank vs. AMG Advanced Metallurgical | Alior Bank vs. Thor Mining PLC | Alior Bank vs. iShares Physical Silver |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Global Correlations Find global opportunities by holding instruments from different markets |