Correlation Between SOUTHWEST AIRLINES and BLOCKCHAIN GRP

Can any of the company-specific risk be diversified away by investing in both SOUTHWEST AIRLINES and BLOCKCHAIN GRP 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 BLOCKCHAIN GRP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SOUTHWEST AIRLINES and BLOCKCHAIN GRP SA, you can compare the effects of market volatilities on SOUTHWEST AIRLINES and BLOCKCHAIN GRP 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 BLOCKCHAIN GRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHWEST AIRLINES and BLOCKCHAIN GRP.

Diversification Opportunities for SOUTHWEST AIRLINES and BLOCKCHAIN GRP

0.59

Correlation Coefficient

SOUTHWEST AIRLINES  BLOCKCHAIN GRP

Very weak diversification

The 3 months correlation between SOUTHWEST and BLOCKCHAIN is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHWEST AIRLINES and BLOCKCHAIN GRP SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLOCKCHAIN GRP SA 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 BLOCKCHAIN GRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLOCKCHAIN GRP SA has no effect on the direction of SOUTHWEST AIRLINES i.e., SOUTHWEST AIRLINES and BLOCKCHAIN GRP go up and down completely randomly.

Pair Corralation between SOUTHWEST AIRLINES and BLOCKCHAIN GRP

Assuming the 90 days trading horizon SOUTHWEST AIRLINES is expected to generate 4.67 times less return on investment than BLOCKCHAIN GRP. But when comparing it to its historical volatility, SOUTHWEST AIRLINES is 3.69 times less risky than BLOCKCHAIN GRP. It trades about 0.28 of its potential returns per unit of risk. BLOCKCHAIN GRP SA is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  64.00  in BLOCKCHAIN GRP SA on April 22, 2025 and sell it today you would earn a total of  277.00  from holding BLOCKCHAIN GRP SA or generate 432.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SOUTHWEST AIRLINES  vs.  BLOCKCHAIN GRP SA

SOUTHWEST AIRLINES

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SOUTHWEST AIRLINES are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SOUTHWEST AIRLINES unveiled solid returns over the last few months and may actually be approaching a breakup point.

BLOCKCHAIN GRP SA

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in BLOCKCHAIN GRP SA are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, BLOCKCHAIN GRP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SOUTHWEST AIRLINES and BLOCKCHAIN GRP

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

The idea behind SOUTHWEST AIRLINES and BLOCKCHAIN GRP SA 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.