Correlation Between SOUTHWEST AIRLINES and SCANDMEDICAL SOLDK
Can any of the company-specific risk be diversified away by investing in both SOUTHWEST AIRLINES and SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOUTHWEST AIRLINES and SCANDMEDICAL SOLDK 040, you can compare the effects of market volatilities on SOUTHWEST AIRLINES and SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHWEST AIRLINES and SCANDMEDICAL SOLDK.
Diversification Opportunities for SOUTHWEST AIRLINES and SCANDMEDICAL SOLDK
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOUTHWEST and SCANDMEDICAL is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHWEST AIRLINES and SCANDMEDICAL SOLDK 040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDMEDICAL SOLDK 040 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 SCANDMEDICAL SOLDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDMEDICAL SOLDK 040 has no effect on the direction of SOUTHWEST AIRLINES i.e., SOUTHWEST AIRLINES and SCANDMEDICAL SOLDK go up and down completely randomly.
Pair Corralation between SOUTHWEST AIRLINES and SCANDMEDICAL SOLDK
Assuming the 90 days trading horizon SOUTHWEST AIRLINES is expected to generate 0.58 times more return on investment than SCANDMEDICAL SOLDK. However, SOUTHWEST AIRLINES is 1.74 times less risky than SCANDMEDICAL SOLDK. It trades about 0.11 of its potential returns per unit of risk. SCANDMEDICAL SOLDK 040 is currently generating about -0.07 per unit of risk. If you would invest 3,075 in SOUTHWEST AIRLINES on September 12, 2024 and sell it today you would earn a total of 120.00 from holding SOUTHWEST AIRLINES or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SOUTHWEST AIRLINES vs. SCANDMEDICAL SOLDK 040
Performance |
| Timeline |
| SOUTHWEST AIRLINES |
| SCANDMEDICAL SOLDK 040 |
SOUTHWEST AIRLINES and SCANDMEDICAL SOLDK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOUTHWEST AIRLINES and SCANDMEDICAL SOLDK
The main advantage of trading using opposite SOUTHWEST AIRLINES and SCANDMEDICAL SOLDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOUTHWEST AIRLINES position performs unexpectedly, SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK will offset losses from the drop in SCANDMEDICAL SOLDK's long position.| SOUTHWEST AIRLINES vs. Apple Inc | SOUTHWEST AIRLINES vs. Apple Inc | SOUTHWEST AIRLINES vs. Apple Inc | SOUTHWEST AIRLINES vs. Apple Inc |
| SCANDMEDICAL SOLDK vs. Align Technology | SCANDMEDICAL SOLDK vs. Superior Plus Corp | SCANDMEDICAL SOLDK vs. SIVERS SEMICONDUCTORS AB | SCANDMEDICAL SOLDK 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |