Correlation Between Alaska Air and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Alaska Air and McEwen Mining 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 McEwen Mining 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 McEwen Mining, you can compare the effects of market volatilities on Alaska Air and McEwen Mining 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 McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and McEwen Mining.
Diversification Opportunities for Alaska Air and McEwen Mining
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alaska and McEwen is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Alaska Air i.e., Alaska Air and McEwen Mining go up and down completely randomly.
Pair Corralation between Alaska Air and McEwen Mining
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 0.6 times more return on investment than McEwen Mining. However, Alaska Air Group is 1.66 times less risky than McEwen Mining. It trades about 0.14 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.04 per unit of risk. If you would invest 3,755 in Alaska Air Group on November 8, 2024 and sell it today you would earn a total of 3,656 from holding Alaska Air Group or generate 97.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.43% |
| Values | Daily Returns |
Alaska Air Group vs. McEwen Mining
Performance |
| Timeline |
| Alaska Air Group |
| McEwen Mining |
Alaska Air and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and McEwen Mining
The main advantage of trading using opposite Alaska Air and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, McEwen Mining 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| Alaska Air vs. Home Depot | Alaska Air vs. SoftBank Group Corp | Alaska Air vs. TBC Bank Group | Alaska Air vs. Discover Financial Services |
| McEwen Mining vs. BE Semiconductor Industries | McEwen Mining vs. Host Hotels Resorts | McEwen Mining vs. Pan American Silver | McEwen Mining vs. Home Depot |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |