Correlation Between Grupo Carso and Southwest Airlines
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By analyzing existing cross correlation between Grupo Carso SAB and Southwest Airlines, you can compare the effects of market volatilities on Grupo Carso 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 Grupo Carso with a short position of Southwest Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and Southwest Airlines.
Diversification Opportunities for Grupo Carso and Southwest Airlines
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grupo and Southwest is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and Southwest Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwest Airlines and Grupo Carso 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 Grupo Carso SAB 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 Grupo Carso i.e., Grupo Carso and Southwest Airlines go up and down completely randomly.
Pair Corralation between Grupo Carso and Southwest Airlines
Assuming the 90 days trading horizon Grupo Carso SAB is expected to under-perform the Southwest Airlines. In addition to that, Grupo Carso is 1.02 times more volatile than Southwest Airlines. It trades about -0.06 of its total potential returns per unit of risk. Southwest Airlines is currently generating about 0.23 per unit of volatility. If you would invest 59,725 in Southwest Airlines on August 29, 2024 and sell it today you would earn a total of 5,995 from holding Southwest Airlines or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Carso SAB vs. Southwest Airlines
Performance |
| Timeline |
| Grupo Carso SAB |
| Southwest Airlines |
Grupo Carso and Southwest Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Carso and Southwest Airlines
The main advantage of trading using opposite Grupo Carso and Southwest Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso 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.| Grupo Carso vs. Grupo Financiero Inbursa | Grupo Carso vs. Alfa SAB de | Grupo Carso vs. Kimberly Clark de Mxico | Grupo Carso vs. Grupo Televisa SAB |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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