Correlation Between Southwest Airlines and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Southwest Airlines and McEwen Mining 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 McEwen Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwest Airlines and McEwen Mining, you can compare the effects of market volatilities on Southwest Airlines and McEwen Mining 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 McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and McEwen Mining.
Diversification Opportunities for Southwest Airlines and McEwen Mining
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southwest and McEwen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and McEwen Mining go up and down completely randomly.
Pair Corralation between Southwest Airlines and McEwen Mining
If you would invest 7,500 in McEwen Mining on March 4, 2024 and sell it today you would earn a total of 0.00 from holding McEwen Mining or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 98.39% |
Values | Daily Returns |
Southwest Airlines vs. McEwen Mining
Performance |
Timeline |
Southwest Airlines |
McEwen Mining |
Southwest Airlines and McEwen Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Southwest Airlines and McEwen Mining
The main advantage of trading using opposite Southwest Airlines and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.The idea behind Southwest Airlines and McEwen Mining 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.McEwen Mining vs. Compaa Minera Autln | McEwen Mining vs. The Select Sector | McEwen Mining vs. Promotora y Operadora | McEwen Mining vs. SPDR Series Trust |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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