Correlation Between Southwest Airlines and BioNTech
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By analyzing existing cross correlation between Southwest Airlines Co and BioNTech SE, you can compare the effects of market volatilities on Southwest Airlines and BioNTech 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 BioNTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and BioNTech.
Diversification Opportunities for Southwest Airlines and BioNTech
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Southwest and BioNTech is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines Co and BioNTech SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNTech SE 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 BioNTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNTech SE has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and BioNTech go up and down completely randomly.
Pair Corralation between Southwest Airlines and BioNTech
Assuming the 90 days horizon Southwest Airlines is expected to generate 1.21 times less return on investment than BioNTech. But when comparing it to its historical volatility, Southwest Airlines Co is 1.77 times less risky than BioNTech. It trades about 0.1 of its potential returns per unit of risk. BioNTech SE is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10,560 in BioNTech SE on October 29, 2024 and sell it today you would earn a total of 1,040 from holding BioNTech SE or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southwest Airlines Co vs. BioNTech SE
Performance |
| Timeline |
| Southwest Airlines |
| BioNTech SE |
Southwest Airlines and BioNTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and BioNTech
The main advantage of trading using opposite Southwest Airlines and BioNTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, BioNTech 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 BioNTech will offset losses from the drop in BioNTech's long position.| Southwest Airlines vs. Columbia Sportswear | Southwest Airlines vs. Playa Hotels Resorts | Southwest Airlines vs. MOVIE GAMES SA | Southwest Airlines vs. Advanced Medical Solutions |
| BioNTech vs. METTLER TOLEDO INTL | BioNTech vs. LODESTAR MIN | BioNTech vs. Carmat SA | BioNTech vs. Air Canada |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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