Correlation Between Southwest Airlines and KERINGUNSPADR 110

Can any of the company-specific risk be diversified away by investing in both Southwest Airlines and KERINGUNSPADR 110 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 KERINGUNSPADR 110 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 KERINGUNSPADR 110 EO, you can compare the effects of market volatilities on Southwest Airlines and KERINGUNSPADR 110 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 KERINGUNSPADR 110. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and KERINGUNSPADR 110.

Diversification Opportunities for Southwest Airlines and KERINGUNSPADR 110

0.0

Correlation Coefficient

Southwest Airlines  KERINGUNSPADR 110

Pay attention - limited upside

The 3 months correlation between Southwest and KERINGUNSPADR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines Co and KERINGUNSPADR 110 EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KERINGUNSPADR 110 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 KERINGUNSPADR 110. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KERINGUNSPADR 110 has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and KERINGUNSPADR 110 go up and down completely randomly.

Pair Corralation between Southwest Airlines and KERINGUNSPADR 110

If you would invest  2,567  in Southwest Airlines Co on March 15, 2024 and sell it today you would earn a total of  71.00  from holding Southwest Airlines Co or generate 2.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Southwest Airlines Co  vs.  KERINGUNSPADR 110 EO

Southwest Airlines

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Southwest Airlines Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Southwest Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

KERINGUNSPADR 110

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KERINGUNSPADR 110 EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KERINGUNSPADR 110 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Southwest Airlines and KERINGUNSPADR 110

The main advantage of trading using opposite Southwest Airlines and KERINGUNSPADR 110 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, KERINGUNSPADR 110 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 KERINGUNSPADR 110 will offset losses from the drop in KERINGUNSPADR 110's long position.

The idea behind Southwest Airlines Co and KERINGUNSPADR 110 EO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.