Correlation Between Southwest Airlines and Sixt Leasing
Can any of the company-specific risk be diversified away by investing in both Southwest Airlines and Sixt Leasing 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 Sixt Leasing 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 Sixt Leasing SE, you can compare the effects of market volatilities on Southwest Airlines and Sixt Leasing 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 Sixt Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and Sixt Leasing.
Diversification Opportunities for Southwest Airlines and Sixt Leasing
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southwest and Sixt is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines Co and Sixt Leasing SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt Leasing 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 Sixt Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixt Leasing SE has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and Sixt Leasing go up and down completely randomly.
Pair Corralation between Southwest Airlines and Sixt Leasing
Assuming the 90 days horizon Southwest Airlines Co is expected to generate 0.74 times more return on investment than Sixt Leasing. However, Southwest Airlines Co is 1.34 times less risky than Sixt Leasing. It trades about 0.02 of its potential returns per unit of risk. Sixt Leasing SE is currently generating about -0.19 per unit of risk. If you would invest 3,164 in Southwest Airlines Co on October 11, 2024 and sell it today you would earn a total of 9.00 from holding Southwest Airlines Co or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southwest Airlines Co vs. Sixt Leasing SE
Performance |
| Timeline |
| Southwest Airlines |
| Sixt Leasing SE |
Southwest Airlines and Sixt Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and Sixt Leasing
The main advantage of trading using opposite Southwest Airlines and Sixt Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, Sixt Leasing 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 Sixt Leasing will offset losses from the drop in Sixt Leasing's long position.| Southwest Airlines vs. Corporate Office Properties | Southwest Airlines vs. UNITED RENTALS | Southwest Airlines vs. Nanjing Panda Electronics | Southwest Airlines vs. ALBIS LEASING AG |
| Sixt Leasing vs. SYSTEMAIR AB | Sixt Leasing vs. Entravision Communications | Sixt Leasing vs. FORWARD AIR P | Sixt Leasing vs. Cogent Communications 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |