Correlation Between Spirit Airlines and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Spirit Airlines and Dow Jones 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 Spirit Airlines and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirit Airlines and Dow Jones Industrial, you can compare the effects of market volatilities on Spirit Airlines and Dow Jones 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 Spirit Airlines with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirit Airlines and Dow Jones.
Diversification Opportunities for Spirit Airlines and Dow Jones
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spirit and Dow is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Spirit Airlines and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Spirit 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 Spirit Airlines are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Spirit Airlines i.e., Spirit Airlines and Dow Jones go up and down completely randomly.
Pair Corralation between Spirit Airlines and Dow Jones
Assuming the 90 days horizon Spirit Airlines is expected to under-perform the Dow Jones. In addition to that, Spirit Airlines is 25.87 times more volatile than Dow Jones Industrial. It trades about -0.25 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.0 per unit of volatility. If you would invest 4,391,098 in Dow Jones Industrial on September 13, 2024 and sell it today you would earn a total of 314.00 from holding Dow Jones Industrial or generate 0.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirit Airlines vs. Dow Jones Industrial
Performance |
| Timeline |
Spirit Airlines and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Spirit Airlines
Pair trading matchups for Spirit Airlines
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Spirit Airlines and Dow Jones
The main advantage of trading using opposite Spirit Airlines and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirit Airlines position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Spirit Airlines vs. RYANAIR HLDGS ADR | Spirit Airlines vs. Ryanair Holdings plc | Spirit Airlines vs. Superior Plus Corp | Spirit Airlines vs. SIVERS SEMICONDUCTORS AB |
| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |