Correlation Between Alaska Air and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC, you can compare the effects of market volatilities on Alaska Air and Lendinvest PLC 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 Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Lendinvest PLC.
Diversification Opportunities for Alaska Air and Lendinvest PLC
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alaska and Lendinvest is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest PLC 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 Lendinvest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendinvest PLC has no effect on the direction of Alaska Air i.e., Alaska Air and Lendinvest PLC go up and down completely randomly.
Pair Corralation between Alaska Air and Lendinvest PLC
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 1.24 times more return on investment than Lendinvest PLC. However, Alaska Air is 1.24 times more volatile than Lendinvest PLC. It trades about 0.35 of its potential returns per unit of risk. Lendinvest PLC is currently generating about 0.07 per unit of risk. If you would invest 4,812 in Alaska Air Group on September 5, 2024 and sell it today you would earn a total of 541.00 from holding Alaska Air Group or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Lendinvest PLC
Performance |
| Timeline |
| Alaska Air Group |
| Lendinvest PLC |
Alaska Air and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Lendinvest PLC
The main advantage of trading using opposite Alaska Air and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Lendinvest PLC 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 Lendinvest PLC will offset losses from the drop in Lendinvest PLC's long position.| Alaska Air vs. Samsung Electronics Co | Alaska Air vs. Samsung Electronics Co | Alaska Air vs. Hyundai Motor | Alaska Air vs. Toyota Motor Corp |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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