Correlation Between Alaska Air and Sparebank
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Sparebank 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 Sparebank 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 Sparebank 1 SR, you can compare the effects of market volatilities on Alaska Air and Sparebank 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 Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Sparebank.
Diversification Opportunities for Alaska Air and Sparebank
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alaska and Sparebank is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Sparebank 1 SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SR 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 Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebank 1 SR has no effect on the direction of Alaska Air i.e., Alaska Air and Sparebank go up and down completely randomly.
Pair Corralation between Alaska Air and Sparebank
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 2.47 times more return on investment than Sparebank. However, Alaska Air is 2.47 times more volatile than Sparebank 1 SR. It trades about 0.07 of its potential returns per unit of risk. Sparebank 1 SR is currently generating about 0.08 per unit of risk. If you would invest 7,020 in Alaska Air Group on November 27, 2024 and sell it today you would earn a total of 221.00 from holding Alaska Air Group or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Sparebank 1 SR
Performance |
| Timeline |
| Alaska Air Group |
| Sparebank 1 SR |
Alaska Air and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Sparebank
The main advantage of trading using opposite Alaska Air and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Sparebank 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 Sparebank will offset losses from the drop in Sparebank's long position.| Alaska Air vs. Empire Metals Limited | Alaska Air vs. Jade Road Investments | Alaska Air vs. URU Metals | Alaska Air vs. Smithson Investment Trust |
| Sparebank vs. Verizon Communications | Sparebank vs. Cairo Communication SpA | Sparebank vs. Livermore Investments Group | Sparebank vs. Bigblu Broadband 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |