Correlation Between Southwest Airlines and Grupo Carso
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By analyzing existing cross correlation between Southwest Airlines and Grupo Carso SAB, you can compare the effects of market volatilities on Southwest Airlines and Grupo Carso 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 Grupo Carso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and Grupo Carso.
Diversification Opportunities for Southwest Airlines and Grupo Carso
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southwest and Grupo is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB 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 are associated (or correlated) with Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and Grupo Carso go up and down completely randomly.
Pair Corralation between Southwest Airlines and Grupo Carso
Assuming the 90 days trading horizon Southwest Airlines is expected to generate 0.96 times more return on investment than Grupo Carso. However, Southwest Airlines is 1.04 times less risky than Grupo Carso. It trades about 0.17 of its potential returns per unit of risk. Grupo Carso SAB is currently generating about -0.05 per unit of risk. If you would invest 58,400 in Southwest Airlines on August 29, 2024 and sell it today you would earn a total of 7,320 from holding Southwest Airlines or generate 12.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southwest Airlines vs. Grupo Carso SAB
Performance |
| Timeline |
| Southwest Airlines |
| Grupo Carso SAB |
Southwest Airlines and Grupo Carso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and Grupo Carso
The main advantage of trading using opposite Southwest Airlines and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, Grupo Carso 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 Grupo Carso will offset losses from the drop in Grupo Carso's long position.The idea behind Southwest Airlines and Grupo Carso SAB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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