Correlation Between Alaska Air and Fastly
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Fastly 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 Alaska Air and Fastly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alaska Air Group and Fastly Inc Cl, you can compare the effects of market volatilities on Alaska Air and Fastly 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 Alaska Air with a short position of Fastly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Fastly.
Diversification Opportunities for Alaska Air and Fastly
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alaska and Fastly is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Fastly Inc Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastly Inc Cl and Alaska 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 Alaska Air Group are associated (or correlated) with Fastly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastly Inc Cl has no effect on the direction of Alaska Air i.e., Alaska Air and Fastly go up and down completely randomly.
Pair Corralation between Alaska Air and Fastly
Assuming the 90 days trading horizon Alaska Air is expected to generate 1.95 times less return on investment than Fastly. But when comparing it to its historical volatility, Alaska Air Group is 2.09 times less risky than Fastly. It trades about 0.33 of its potential returns per unit of risk. Fastly Inc Cl is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 713.00 in Fastly Inc Cl on September 13, 2024 and sell it today you would earn a total of 360.00 from holding Fastly Inc Cl or generate 50.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Alaska Air Group vs. Fastly Inc Cl
Performance |
| Timeline |
| Alaska Air Group |
| Fastly Inc Cl |
Alaska Air and Fastly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Fastly
The main advantage of trading using opposite Alaska Air and Fastly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Fastly 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 Fastly will offset losses from the drop in Fastly's long position.| Alaska Air vs. Samsung Electronics Co | Alaska Air vs. Samsung Electronics Co | Alaska Air vs. Hyundai Motor | Alaska Air vs. Reliance Industries Ltd |
| Fastly vs. Cardinal Health | Fastly vs. Edita Food Industries | Fastly vs. Leroy Seafood Group | Fastly vs. Naked Wines plc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |