Correlation Between SOUTHWEST AIRLINES and Siamgas
Can any of the company-specific risk be diversified away by investing in both SOUTHWEST AIRLINES and Siamgas 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 Siamgas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOUTHWEST AIRLINES and Siamgas And Petrochemicals, you can compare the effects of market volatilities on SOUTHWEST AIRLINES and Siamgas 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 Siamgas. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHWEST AIRLINES and Siamgas.
Diversification Opportunities for SOUTHWEST AIRLINES and Siamgas
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SOUTHWEST and Siamgas is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHWEST AIRLINES and Siamgas And Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siamgas And Petroche 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 are associated (or correlated) with Siamgas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siamgas And Petroche has no effect on the direction of SOUTHWEST AIRLINES i.e., SOUTHWEST AIRLINES and Siamgas go up and down completely randomly.
Pair Corralation between SOUTHWEST AIRLINES and Siamgas
Assuming the 90 days trading horizon SOUTHWEST AIRLINES is expected to generate 0.54 times more return on investment than Siamgas. However, SOUTHWEST AIRLINES is 1.83 times less risky than Siamgas. It trades about 0.21 of its potential returns per unit of risk. Siamgas And Petrochemicals is currently generating about 0.01 per unit of risk. If you would invest 3,119 in SOUTHWEST AIRLINES on October 14, 2024 and sell it today you would earn a total of 123.00 from holding SOUTHWEST AIRLINES or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOUTHWEST AIRLINES vs. Siamgas And Petrochemicals
Performance |
| Timeline |
| SOUTHWEST AIRLINES |
| Siamgas And Petroche |
SOUTHWEST AIRLINES and Siamgas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOUTHWEST AIRLINES and Siamgas
The main advantage of trading using opposite SOUTHWEST AIRLINES and Siamgas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOUTHWEST AIRLINES position performs unexpectedly, Siamgas 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 Siamgas will offset losses from the drop in Siamgas' long position.| SOUTHWEST AIRLINES vs. Ubisoft Entertainment SA | SOUTHWEST AIRLINES vs. Nordic Semiconductor ASA | SOUTHWEST AIRLINES vs. Taiwan Semiconductor Manufacturing | SOUTHWEST AIRLINES vs. TOREX SEMICONDUCTOR LTD |
| Siamgas vs. SOUTHWEST AIRLINES | Siamgas vs. Astral Foods Limited | Siamgas vs. COFCO Joycome Foods | Siamgas vs. Aegean Airlines SA |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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