Correlation Between Southwest Airlines and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Southwest Airlines and Deutsche Bank 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 Deutsche Bank 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 Deutsche Bank Aktiengesellschaft, you can compare the effects of market volatilities on Southwest Airlines and Deutsche Bank 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 Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and Deutsche Bank.
Diversification Opportunities for Southwest Airlines and Deutsche Bank
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Southwest and Deutsche is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines Co and Deutsche Bank Aktiengesellscha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank Aktien 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 Deutsche Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Bank Aktien has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and Deutsche Bank go up and down completely randomly.
Pair Corralation between Southwest Airlines and Deutsche Bank
If you would invest 9,590 in Deutsche Bank Aktiengesellschaft on September 14, 2024 and sell it today you would earn a total of 1,120 from holding Deutsche Bank Aktiengesellschaft or generate 11.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southwest Airlines Co vs. Deutsche Bank Aktiengesellscha
Performance |
| Timeline |
| Southwest Airlines |
| Deutsche Bank Aktien |
Southwest Airlines and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and Deutsche Bank
The main advantage of trading using opposite Southwest Airlines and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, Deutsche Bank 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 Deutsche Bank will offset losses from the drop in Deutsche Bank's long position.| Southwest Airlines vs. Take Two Interactive Software | Southwest Airlines vs. Costco Wholesale | Southwest Airlines vs. Nordon Indstrias Metalrgicas | Southwest Airlines vs. Mitsubishi UFJ Financial |
| Deutsche Bank vs. MAHLE Metal Leve | Deutsche Bank vs. Healthpeak Properties | Deutsche Bank vs. Southwest Airlines Co | Deutsche Bank vs. Teladoc Health |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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