Correlation Between Southwest Airlines and Origin Agritech
Can any of the company-specific risk be diversified away by investing in both Southwest Airlines and Origin Agritech 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 Origin Agritech 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 Origin Agritech, you can compare the effects of market volatilities on Southwest Airlines and Origin Agritech 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 Origin Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and Origin Agritech.
Diversification Opportunities for Southwest Airlines and Origin Agritech
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southwest and Origin is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines Co and Origin Agritech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Agritech 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 Origin Agritech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Agritech has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and Origin Agritech go up and down completely randomly.
Pair Corralation between Southwest Airlines and Origin Agritech
Assuming the 90 days horizon Southwest Airlines Co is expected to generate 0.54 times more return on investment than Origin Agritech. However, Southwest Airlines Co is 1.84 times less risky than Origin Agritech. It trades about 0.27 of its potential returns per unit of risk. Origin Agritech is currently generating about -0.04 per unit of risk. If you would invest 2,724 in Southwest Airlines Co on August 29, 2024 and sell it today you would earn a total of 355.00 from holding Southwest Airlines Co or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Southwest Airlines Co vs. Origin Agritech
Performance |
| Timeline |
| Southwest Airlines |
| Origin Agritech |
Southwest Airlines and Origin Agritech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and Origin Agritech
The main advantage of trading using opposite Southwest Airlines and Origin Agritech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, Origin Agritech 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 Origin Agritech will offset losses from the drop in Origin Agritech's long position.| Southwest Airlines vs. RYANAIR HLDGS ADR | Southwest Airlines vs. Ryanair Holdings plc | Southwest Airlines vs. Superior Plus Corp | Southwest Airlines vs. NMI Holdings |
| Origin Agritech vs. Playtech plc | Origin Agritech vs. AAC TECHNOLOGHLDGADR | Origin Agritech vs. SCANDMEDICAL SOLDK 040 | Origin Agritech vs. ONWARD MEDICAL BV |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |