Correlation Between Southwestern Energy and DSV Panalpina
Can any of the company-specific risk be diversified away by investing in both Southwestern Energy and DSV Panalpina 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 Southwestern Energy and DSV Panalpina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwestern Energy and DSV Panalpina AS, you can compare the effects of market volatilities on Southwestern Energy and DSV Panalpina 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 Southwestern Energy with a short position of DSV Panalpina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwestern Energy and DSV Panalpina.
Diversification Opportunities for Southwestern Energy and DSV Panalpina
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Southwestern and DSV is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Southwestern Energy and DSV Panalpina AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSV Panalpina AS and Southwestern Energy 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 Southwestern Energy are associated (or correlated) with DSV Panalpina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSV Panalpina AS has no effect on the direction of Southwestern Energy i.e., Southwestern Energy and DSV Panalpina go up and down completely randomly.
Pair Corralation between Southwestern Energy and DSV Panalpina
Considering the 90-day investment horizon Southwestern Energy is expected to generate 0.71 times more return on investment than DSV Panalpina. However, Southwestern Energy is 1.41 times less risky than DSV Panalpina. It trades about 0.15 of its potential returns per unit of risk. DSV Panalpina AS is currently generating about -0.32 per unit of risk. If you would invest 733.00 in Southwestern Energy on January 26, 2024 and sell it today you would earn a total of 26.00 from holding Southwestern Energy or generate 3.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 90.48% |
Values | Daily Returns |
Southwestern Energy vs. DSV Panalpina AS
Performance |
Timeline |
Southwestern Energy |
DSV Panalpina AS |
Southwestern Energy and DSV Panalpina Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Southwestern Energy and DSV Panalpina
The main advantage of trading using opposite Southwestern Energy and DSV Panalpina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwestern Energy position performs unexpectedly, DSV Panalpina 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 DSV Panalpina will offset losses from the drop in DSV Panalpina's long position.Southwestern Energy vs. Antero Resources Corp | Southwestern Energy vs. Chesapeake Energy Corp | Southwestern Energy vs. EQT Corporation | Southwestern Energy vs. Matador Resources |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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