Correlation Between General Shopping and Southwest Airlines
Can any of the company-specific risk be diversified away by investing in both General Shopping 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 General Shopping and Southwest Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Shopping e and Southwest Airlines Co, you can compare the effects of market volatilities on General Shopping 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 General Shopping with a short position of Southwest Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Shopping and Southwest Airlines.
Diversification Opportunities for General Shopping and Southwest Airlines
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between General and Southwest is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding General Shopping e and Southwest Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwest Airlines and General Shopping 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 General Shopping e 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 General Shopping i.e., General Shopping and Southwest Airlines go up and down completely randomly.
Pair Corralation between General Shopping and Southwest Airlines
If you would invest 16,456 in Southwest Airlines Co on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Southwest Airlines Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Shopping e vs. Southwest Airlines Co
Performance |
| Timeline |
| General Shopping e |
| Southwest Airlines |
General Shopping and Southwest Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Shopping and Southwest Airlines
The main advantage of trading using opposite General Shopping and Southwest Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Shopping 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.| General Shopping vs. Southwest Airlines Co | General Shopping vs. Bank of America | General Shopping vs. Lloyds Banking Group | General Shopping vs. Brpr Corporate Offices |
| Southwest Airlines vs. Take Two Interactive Software | Southwest Airlines vs. BIONTECH SE DRN | Southwest Airlines vs. Micron Technology | Southwest Airlines vs. Broadcom |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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