Correlation Between JIAHUA STORES and Southwest Airlines
Can any of the company-specific risk be diversified away by investing in both JIAHUA STORES and Southwest 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 JIAHUA STORES and Southwest Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JIAHUA STORES and Southwest Airlines Co, you can compare the effects of market volatilities on JIAHUA STORES and Southwest 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 JIAHUA STORES with a short position of Southwest Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of JIAHUA STORES and Southwest Airlines.
Diversification Opportunities for JIAHUA STORES and Southwest Airlines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JIAHUA and Southwest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JIAHUA STORES and Southwest Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwest Airlines and JIAHUA STORES 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 JIAHUA STORES are associated (or correlated) with Southwest Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southwest Airlines has no effect on the direction of JIAHUA STORES i.e., JIAHUA STORES and Southwest Airlines go up and down completely randomly.
Pair Corralation between JIAHUA STORES and Southwest Airlines
If you would invest 3,150 in Southwest Airlines Co on October 14, 2024 and sell it today you would earn a total of 24.00 from holding Southwest Airlines Co or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
JIAHUA STORES vs. Southwest Airlines Co
Performance |
| Timeline |
| JIAHUA STORES |
| Southwest Airlines |
JIAHUA STORES and Southwest Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JIAHUA STORES and Southwest Airlines
The main advantage of trading using opposite JIAHUA STORES and Southwest Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JIAHUA STORES position performs unexpectedly, Southwest 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 Southwest Airlines will offset losses from the drop in Southwest Airlines' long position.| JIAHUA STORES vs. TELECOM ITALRISP ADR10 | JIAHUA STORES vs. Computershare Limited | JIAHUA STORES vs. ALERION CLEANPOWER | JIAHUA STORES vs. COMPUTERSHARE |
| Southwest Airlines vs. JIAHUA STORES | Southwest Airlines vs. Highlight Communications AG | Southwest Airlines vs. Retail Estates NV | Southwest Airlines vs. Burlington Stores |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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