Correlation Between Sezzle Common and Southwest Airlines
Can any of the company-specific risk be diversified away by investing in both Sezzle Common 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 Sezzle Common and Southwest Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sezzle Common Stock and Southwest Airlines, you can compare the effects of market volatilities on Sezzle Common 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 Sezzle Common with a short position of Southwest Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sezzle Common and Southwest Airlines.
Diversification Opportunities for Sezzle Common and Southwest Airlines
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sezzle and Southwest is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sezzle Common Stock and Southwest Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwest Airlines and Sezzle Common 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 Sezzle Common Stock 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 Sezzle Common i.e., Sezzle Common and Southwest Airlines go up and down completely randomly.
Pair Corralation between Sezzle Common and Southwest Airlines
Given the investment horizon of 90 days Sezzle Common Stock is expected to generate 3.33 times more return on investment than Southwest Airlines. However, Sezzle Common is 3.33 times more volatile than Southwest Airlines. It trades about -0.05 of its potential returns per unit of risk. Southwest Airlines is currently generating about -0.2 per unit of risk. If you would invest 25,580 in Sezzle Common Stock on November 1, 2024 and sell it today you would lose (2,213) from holding Sezzle Common Stock or give up 8.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sezzle Common Stock vs. Southwest Airlines
Performance |
| Timeline |
| Sezzle Common Stock |
| Southwest Airlines |
Sezzle Common and Southwest Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sezzle Common and Southwest Airlines
The main advantage of trading using opposite Sezzle Common and Southwest Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sezzle Common 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.| Sezzle Common vs. Southwest Airlines | Sezzle Common vs. Allegiant Travel | Sezzle Common vs. Thai Beverage PCL | Sezzle Common vs. Copa Holdings SA |
| Southwest Airlines vs. United Airlines Holdings | Southwest Airlines vs. American Airlines Group | Southwest Airlines vs. JetBlue Airways Corp | Southwest Airlines vs. Delta Air Lines |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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