Correlation Between WIZZ AIR and CSX

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

By analyzing existing cross correlation between WIZZ AIR HLDGUNSPADR4 and CSX Corporation, you can compare the effects of market volatilities on WIZZ AIR and CSX 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 WIZZ AIR with a short position of CSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIZZ AIR and CSX.

Diversification Opportunities for WIZZ AIR and CSX

-0.29

Correlation Coefficient

WIZZ AIR  CSX

Very good diversification

The 3 months correlation between WIZZ and CSX is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding WIZZ AIR HLDGUNSPADR4 and CSX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX Corporation and WIZZ AIR 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 WIZZ AIR HLDGUNSPADR4 are associated (or correlated) with CSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX Corporation has no effect on the direction of WIZZ AIR i.e., WIZZ AIR and CSX go up and down completely randomly.

Pair Corralation between WIZZ AIR and CSX

Assuming the 90 days trading horizon WIZZ AIR HLDGUNSPADR4 is expected to generate 3.3 times more return on investment than CSX. However, WIZZ AIR is 3.3 times more volatile than CSX Corporation. It trades about 0.06 of its potential returns per unit of risk. CSX Corporation is currently generating about -0.14 per unit of risk. If you would invest  440.00  in WIZZ AIR HLDGUNSPADR4 on December 19, 2024 and sell it today you would earn a total of  46.00  from holding WIZZ AIR HLDGUNSPADR4 or generate 10.45% return on investment over 90 days.

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

WIZZ AIR HLDGUNSPADR4  vs.  CSX Corp.

WIZZ AIR HLDGUNSPADR4

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WIZZ AIR HLDGUNSPADR4 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, WIZZ AIR reported solid returns over the last few months and may actually be approaching a breakup point.

CSX Corporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days CSX Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with WIZZ AIR and CSX

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

The idea behind WIZZ AIR HLDGUNSPADR4 and CSX Corporation 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.