Correlation Between Southwest Airlines and EPSILON HEALTHCARE

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

Diversification Opportunities for Southwest Airlines and EPSILON HEALTHCARE

0.0

Correlation Coefficient

Southwest Airlines  EPSILON HEALTHCARE

Pay attention - limited upside

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

Pair Corralation between Southwest Airlines and EPSILON HEALTHCARE

If you would invest  2,184  in Southwest Airlines Co on April 24, 2025 and sell it today you would earn a total of  946.00  from holding Southwest Airlines Co or generate 43.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Southwest Airlines Co  vs.  EPSILON HEALTHCARE LTD

Southwest Airlines

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Southwest Airlines Co are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Southwest Airlines reported solid returns over the last few months and may actually be approaching a breakup point.

EPSILON HEALTHCARE LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days EPSILON HEALTHCARE LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, EPSILON HEALTHCARE 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 EPSILON HEALTHCARE

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

The idea behind Southwest Airlines Co and EPSILON HEALTHCARE LTD 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.