Correlation Between Southwest Airlines and ZINC MEDIA
Can any of the company-specific risk be diversified away by investing in both Southwest Airlines and ZINC 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 ZINC 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 ZINC MEDIA GR, you can compare the effects of market volatilities on Southwest Airlines and ZINC 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 ZINC MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and ZINC MEDIA.
Diversification Opportunities for Southwest Airlines and ZINC MEDIA
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southwest and ZINC is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines Co and ZINC MEDIA GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINC MEDIA GR 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 ZINC MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINC MEDIA GR has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and ZINC MEDIA go up and down completely randomly.
Pair Corralation between Southwest Airlines and ZINC MEDIA
Assuming the 90 days horizon Southwest Airlines Co is expected to generate 0.86 times more return on investment than ZINC MEDIA. However, Southwest Airlines Co is 1.16 times less risky than ZINC MEDIA. It trades about 0.02 of its potential returns per unit of risk. ZINC MEDIA GR is currently generating about -0.03 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 Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southwest Airlines Co vs. ZINC MEDIA GR
Performance |
| Timeline |
| Southwest Airlines |
| ZINC MEDIA GR |
Southwest Airlines and ZINC MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and ZINC MEDIA
The main advantage of trading using opposite Southwest Airlines and ZINC MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, ZINC 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 ZINC MEDIA will offset losses from the drop in ZINC 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 |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stocks Directory Find actively traded stocks across global markets |