Correlation Between Southwest Airlines and PACIFIC
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By analyzing existing cross correlation between Southwest Airlines and PACIFIC GAS ELECTRIC, you can compare the effects of market volatilities on Southwest Airlines and PACIFIC 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 PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and PACIFIC.
Diversification Opportunities for Southwest Airlines and PACIFIC
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Southwest and PACIFIC is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines and PACIFIC GAS ELECTRIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC GAS ELECTRIC 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 PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC GAS ELECTRIC has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and PACIFIC go up and down completely randomly.
Pair Corralation between Southwest Airlines and PACIFIC
Considering the 90-day investment horizon Southwest Airlines is expected to generate 3.29 times more return on investment than PACIFIC. However, Southwest Airlines is 3.29 times more volatile than PACIFIC GAS ELECTRIC. It trades about 0.03 of its potential returns per unit of risk. PACIFIC GAS ELECTRIC is currently generating about 0.01 per unit of risk. If you would invest 2,883 in Southwest Airlines on September 14, 2024 and sell it today you would earn a total of 412.00 from holding Southwest Airlines or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.79% |
| Values | Daily Returns |
Southwest Airlines vs. PACIFIC GAS ELECTRIC
Performance |
| Timeline |
| Southwest Airlines |
| PACIFIC GAS ELECTRIC |
Southwest Airlines and PACIFIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and PACIFIC
The main advantage of trading using opposite Southwest Airlines and PACIFIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, PACIFIC 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 PACIFIC will offset losses from the drop in PACIFIC'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 |
| PACIFIC vs. NetSol Technologies | PACIFIC vs. Kaltura | PACIFIC vs. Capital Clean Energy | PACIFIC vs. Cadence Design Systems |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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