Correlation Between Calibre Mining and Southwest Airlines
Can any of the company-specific risk be diversified away by investing in both Calibre Mining and Southwest Airlines 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 Calibre Mining and Southwest Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calibre Mining Corp and Southwest Airlines Co, you can compare the effects of market volatilities on Calibre Mining and Southwest Airlines 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 Calibre Mining with a short position of Southwest Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and Southwest Airlines.
Diversification Opportunities for Calibre Mining and Southwest Airlines
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Calibre and Southwest is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Southwest Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwest Airlines and Calibre Mining 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 Calibre Mining Corp are associated (or correlated) with Southwest Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southwest Airlines has no effect on the direction of Calibre Mining i.e., Calibre Mining and Southwest Airlines go up and down completely randomly.
Pair Corralation between Calibre Mining and Southwest Airlines
Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 1.85 times more return on investment than Southwest Airlines. However, Calibre Mining is 1.85 times more volatile than Southwest Airlines Co. It trades about 0.26 of its potential returns per unit of risk. Southwest Airlines Co is currently generating about -0.21 per unit of risk. If you would invest 148.00 in Calibre Mining Corp on November 3, 2024 and sell it today you would earn a total of 26.00 from holding Calibre Mining Corp or generate 17.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calibre Mining Corp vs. Southwest Airlines Co
Performance |
| Timeline |
| Calibre Mining Corp |
| Southwest Airlines |
Calibre Mining and Southwest Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calibre Mining and Southwest Airlines
The main advantage of trading using opposite Calibre Mining and Southwest Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calibre Mining position performs unexpectedly, Southwest Airlines 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 Southwest Airlines will offset losses from the drop in Southwest Airlines' long position.| Calibre Mining vs. PICKN PAY STORES | Calibre Mining vs. East Africa Metals | Calibre Mining vs. Clean Energy Fuels | Calibre Mining vs. MCEWEN MINING INC |
| Southwest Airlines vs. Diamyd Medical AB | Southwest Airlines vs. Norwegian Air Shuttle | Southwest Airlines vs. Compugroup Medical SE | Southwest Airlines vs. SYSTEMAIR AB |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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