Correlation Between Southwest Airlines and Sancus Lending
Can any of the company-specific risk be diversified away by investing in both Southwest Airlines and Sancus Lending 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 Sancus Lending 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 Sancus Lending Group, you can compare the effects of market volatilities on Southwest Airlines and Sancus Lending 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 Sancus Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and Sancus Lending.
Diversification Opportunities for Southwest Airlines and Sancus Lending
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Southwest and Sancus is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines Co and Sancus Lending Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sancus Lending Group 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 Sancus Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sancus Lending Group has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and Sancus Lending go up and down completely randomly.
Pair Corralation between Southwest Airlines and Sancus Lending
Assuming the 90 days trading horizon Southwest Airlines Co is expected to under-perform the Sancus Lending. But the stock apears to be less risky and, when comparing its historical volatility, Southwest Airlines Co is 5.69 times less risky than Sancus Lending. The stock trades about -0.28 of its potential returns per unit of risk. The Sancus Lending Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Sancus Lending Group on November 28, 2024 and sell it today you would earn a total of 7.00 from holding Sancus Lending Group or generate 15.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Southwest Airlines Co vs. Sancus Lending Group
Performance |
| Timeline |
| Southwest Airlines |
| Sancus Lending Group |
Southwest Airlines and Sancus Lending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and Sancus Lending
The main advantage of trading using opposite Southwest Airlines and Sancus Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, Sancus Lending 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 Sancus Lending will offset losses from the drop in Sancus Lending's long position.| Southwest Airlines vs. Catalyst Media Group | Southwest Airlines vs. One Media iP | Southwest Airlines vs. SBM Offshore NV | Southwest Airlines vs. XLMedia PLC |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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