Correlation Between Southwest Airlines and Cadus
Can any of the company-specific risk be diversified away by investing in both Southwest Airlines and Cadus 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 Cadus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwest Airlines and Cadus, you can compare the effects of market volatilities on Southwest Airlines and Cadus 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 Cadus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and Cadus.
Diversification Opportunities for Southwest Airlines and Cadus
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southwest and Cadus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines and Cadus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadus 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 Cadus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadus has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and Cadus go up and down completely randomly.
Pair Corralation between Southwest Airlines and Cadus
If you would invest 2,851 in Southwest Airlines on January 24, 2024 and sell it today you would earn a total of 122.00 from holding Southwest Airlines or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Southwest Airlines vs. Cadus
Performance |
| Timeline |
| Southwest Airlines |
| Cadus |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Southwest Airlines and Cadus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and Cadus
The main advantage of trading using opposite Southwest Airlines and Cadus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, Cadus 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 Cadus will offset losses from the drop in Cadus' long position.| Southwest Airlines vs. United Airlines Holdings | Southwest Airlines vs. American Airlines Group | Southwest Airlines vs. JetBlue Airways Corp | Southwest Airlines vs. Spirit Airlines |
| Cadus vs. Boston Properties | Cadus vs. Mid Atlantic Home Health | Cadus vs. Nexstar Broadcasting Group | Cadus vs. LB Foster |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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