Correlation Between Monks Investment and Southwest Airlines
Can any of the company-specific risk be diversified away by investing in both Monks Investment 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 Monks Investment and Southwest Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monks Investment Trust and Southwest Airlines Co, you can compare the effects of market volatilities on Monks Investment 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 Monks Investment with a short position of Southwest Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monks Investment and Southwest Airlines.
Diversification Opportunities for Monks Investment and Southwest Airlines
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Monks and Southwest is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and Southwest Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwest Airlines and Monks Investment 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 Monks Investment Trust 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 Monks Investment i.e., Monks Investment and Southwest Airlines go up and down completely randomly.
Pair Corralation between Monks Investment and Southwest Airlines
Assuming the 90 days trading horizon Monks Investment Trust is expected to generate 0.83 times more return on investment than Southwest Airlines. However, Monks Investment Trust is 1.2 times less risky than Southwest Airlines. It trades about -0.05 of its potential returns per unit of risk. Southwest Airlines Co is currently generating about -0.28 per unit of risk. If you would invest 129,600 in Monks Investment Trust on November 28, 2024 and sell it today you would lose (1,800) from holding Monks Investment Trust or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monks Investment Trust vs. Southwest Airlines Co
Performance |
| Timeline |
| Monks Investment Trust |
| Southwest Airlines |
Monks Investment and Southwest Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monks Investment and Southwest Airlines
The main advantage of trading using opposite Monks Investment and Southwest Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monks Investment 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.| Monks Investment vs. Fulcrum Metals PLC | Monks Investment vs. AfriTin Mining | Monks Investment vs. Ecclesiastical Insurance Office | Monks Investment vs. GreenX Metals |
| Southwest Airlines vs. Catalyst Media Group | Southwest Airlines vs. One Media iP | Southwest Airlines vs. SBM Offshore NV | Southwest Airlines vs. XLMedia PLC |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |