Correlation Between Southwest Airlines and CNVISION MEDIA
Can any of the company-specific risk be diversified away by investing in both Southwest Airlines and CNVISION MEDIA 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 CNVISION MEDIA 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 CNVISION MEDIA, you can compare the effects of market volatilities on Southwest Airlines and CNVISION MEDIA 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 CNVISION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and CNVISION MEDIA.
Diversification Opportunities for Southwest Airlines and CNVISION MEDIA
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Southwest and CNVISION is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines Co and CNVISION MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNVISION MEDIA 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 CNVISION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNVISION MEDIA has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and CNVISION MEDIA go up and down completely randomly.
Pair Corralation between Southwest Airlines and CNVISION MEDIA
Assuming the 90 days horizon Southwest Airlines Co is expected to generate 0.69 times more return on investment than CNVISION MEDIA. However, Southwest Airlines Co is 1.45 times less risky than CNVISION MEDIA. It trades about 0.02 of its potential returns per unit of risk. CNVISION MEDIA is currently generating about 0.0 per unit of risk. If you would invest 2,954 in Southwest Airlines Co on September 20, 2024 and sell it today you would earn a total of 156.00 from holding Southwest Airlines Co or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southwest Airlines Co vs. CNVISION MEDIA
Performance |
| Timeline |
| Southwest Airlines |
| CNVISION MEDIA |
Southwest Airlines and CNVISION MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and CNVISION MEDIA
The main advantage of trading using opposite Southwest Airlines and CNVISION MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, CNVISION MEDIA 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 CNVISION MEDIA will offset losses from the drop in CNVISION MEDIA's long position.| Southwest Airlines vs. RYANAIR HLDGS ADR | Southwest Airlines vs. Superior Plus Corp | Southwest Airlines vs. SIVERS SEMICONDUCTORS AB | Southwest Airlines vs. Norsk Hydro ASA |
| CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Microsoft |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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