Correlation Between Southwest Airlines and Sezzle Common
Can any of the company-specific risk be diversified away by investing in both Southwest Airlines and Sezzle Common 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 Sezzle Common into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwest Airlines and Sezzle Common Stock, you can compare the effects of market volatilities on Southwest Airlines and Sezzle Common 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 Sezzle Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and Sezzle Common.
Diversification Opportunities for Southwest Airlines and Sezzle Common
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Southwest and Sezzle is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines and Sezzle Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sezzle Common Stock 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 Sezzle Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sezzle Common Stock has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and Sezzle Common go up and down completely randomly.
Pair Corralation between Southwest Airlines and Sezzle Common
Considering the 90-day investment horizon Southwest Airlines is expected to under-perform the Sezzle Common. But the stock apears to be less risky and, when comparing its historical volatility, Southwest Airlines is 3.15 times less risky than Sezzle Common. The stock trades about -0.16 of its potential returns per unit of risk. The Sezzle Common Stock is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 24,812 in Sezzle Common Stock on November 9, 2024 and sell it today you would lose (293.00) from holding Sezzle Common Stock or give up 1.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southwest Airlines vs. Sezzle Common Stock
Performance |
| Timeline |
| Southwest Airlines |
| Sezzle Common Stock |
Southwest Airlines and Sezzle Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and Sezzle Common
The main advantage of trading using opposite Southwest Airlines and Sezzle Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, Sezzle Common 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 Sezzle Common will offset losses from the drop in Sezzle Common's long position.| Southwest Airlines vs. United Airlines Holdings | Southwest Airlines vs. American Airlines Group | Southwest Airlines vs. JetBlue Airways Corp | Southwest Airlines vs. Delta Air Lines |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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