Correlation Between Southwest Airlines and TRANSCANADA
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By analyzing existing cross correlation between Southwest Airlines and TRANSCANADA PIPELINES LTD, you can compare the effects of market volatilities on Southwest Airlines and TRANSCANADA 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 TRANSCANADA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and TRANSCANADA.
Diversification Opportunities for Southwest Airlines and TRANSCANADA
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Southwest and TRANSCANADA is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines and TRANSCANADA PIPELINES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSCANADA PIPELINES LTD 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 TRANSCANADA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSCANADA PIPELINES LTD has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and TRANSCANADA go up and down completely randomly.
Pair Corralation between Southwest Airlines and TRANSCANADA
Considering the 90-day investment horizon Southwest Airlines is expected to generate 1.88 times more return on investment than TRANSCANADA. However, Southwest Airlines is 1.88 times more volatile than TRANSCANADA PIPELINES LTD. It trades about 0.19 of its potential returns per unit of risk. TRANSCANADA PIPELINES LTD is currently generating about -0.15 per unit of risk. If you would invest 3,061 in Southwest Airlines on September 2, 2024 and sell it today you would earn a total of 175.00 from holding Southwest Airlines or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 52.38% |
| Values | Daily Returns |
Southwest Airlines vs. TRANSCANADA PIPELINES LTD
Performance |
| Timeline |
| Southwest Airlines |
| TRANSCANADA PIPELINES LTD |
Southwest Airlines and TRANSCANADA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and TRANSCANADA
The main advantage of trading using opposite Southwest Airlines and TRANSCANADA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, TRANSCANADA 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 TRANSCANADA will offset losses from the drop in TRANSCANADA'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 |
| TRANSCANADA vs. Southwest Airlines | TRANSCANADA vs. Allegiant Travel | TRANSCANADA vs. Stepstone Group | TRANSCANADA vs. Independence Realty Trust |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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