Correlation Between Mulberry Group and Southwest Airlines
Can any of the company-specific risk be diversified away by investing in both Mulberry Group 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 Mulberry Group and Southwest Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mulberry Group PLC and Southwest Airlines Co, you can compare the effects of market volatilities on Mulberry Group 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 Mulberry Group with a short position of Southwest Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Southwest Airlines.
Diversification Opportunities for Mulberry Group and Southwest Airlines
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mulberry and Southwest is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Southwest Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwest Airlines and Mulberry Group 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 Mulberry Group PLC 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 Mulberry Group i.e., Mulberry Group and Southwest Airlines go up and down completely randomly.
Pair Corralation between Mulberry Group and Southwest Airlines
Assuming the 90 days trading horizon Mulberry Group PLC is expected to under-perform the Southwest Airlines. In addition to that, Mulberry Group is 2.51 times more volatile than Southwest Airlines Co. It trades about -0.1 of its total potential returns per unit of risk. Southwest Airlines Co is currently generating about 0.18 per unit of volatility. If you would invest 3,059 in Southwest Airlines Co on September 1, 2024 and sell it today you would earn a total of 193.00 from holding Southwest Airlines Co or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mulberry Group PLC vs. Southwest Airlines Co
Performance |
| Timeline |
| Mulberry Group PLC |
| Southwest Airlines |
Mulberry Group and Southwest Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Southwest Airlines
The main advantage of trading using opposite Mulberry Group and Southwest Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group 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.| Mulberry Group vs. Auto Trader Group | Mulberry Group vs. Diversified Energy | Mulberry Group vs. Air Products Chemicals | Mulberry Group vs. Lowland Investment Co |
| Southwest Airlines vs. Uniper SE | Southwest Airlines vs. Mulberry Group PLC | Southwest Airlines vs. London Security Plc | Southwest Airlines vs. Triad Group 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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