Correlation Between Southwest Airlines and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both Southwest Airlines and Beyond Meat 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 Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwest Airlines Co and Beyond Meat, you can compare the effects of market volatilities on Southwest Airlines and Beyond Meat 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 Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and Beyond Meat.
Diversification Opportunities for Southwest Airlines and Beyond Meat
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southwest and Beyond is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines Co and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat 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 Co are associated (or correlated) with Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and Beyond Meat go up and down completely randomly.
Pair Corralation between Southwest Airlines and Beyond Meat
If you would invest 16,456 in Southwest Airlines Co on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Southwest Airlines Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southwest Airlines Co vs. Beyond Meat
Performance |
| Timeline |
| Southwest Airlines |
| Beyond Meat |
Southwest Airlines and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and Beyond Meat
The main advantage of trading using opposite Southwest Airlines and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat's long position.| Southwest Airlines vs. MAHLE Metal Leve | Southwest Airlines vs. Tres Tentos Agroindustrial | Southwest Airlines vs. Metalurgica Gerdau SA | Southwest Airlines vs. Multilaser Industrial SA |
| Beyond Meat vs. JBS SA | Beyond Meat vs. M Dias Branco | Beyond Meat vs. Marfrig Global Foods | Beyond Meat vs. Camil Alimentos SA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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