Correlation Between Alaska Air and MTI Wireless
Can any of the company-specific risk be diversified away by investing in both Alaska Air and MTI Wireless 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 MTI Wireless 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 MTI Wireless Edge, you can compare the effects of market volatilities on Alaska Air and MTI Wireless 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 MTI Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and MTI Wireless.
Diversification Opportunities for Alaska Air and MTI Wireless
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alaska and MTI is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and MTI Wireless Edge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI Wireless Edge 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 MTI Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI Wireless Edge has no effect on the direction of Alaska Air i.e., Alaska Air and MTI Wireless go up and down completely randomly.
Pair Corralation between Alaska Air and MTI Wireless
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 2.81 times more return on investment than MTI Wireless. However, Alaska Air is 2.81 times more volatile than MTI Wireless Edge. It trades about 0.33 of its potential returns per unit of risk. MTI Wireless Edge is currently generating about -0.18 per unit of risk. If you would invest 5,139 in Alaska Air Group on September 13, 2024 and sell it today you would earn a total of 1,221 from holding Alaska Air Group or generate 23.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. MTI Wireless Edge
Performance |
| Timeline |
| Alaska Air Group |
| MTI Wireless Edge |
Alaska Air and MTI Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and MTI Wireless
The main advantage of trading using opposite Alaska Air and MTI Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, MTI Wireless 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 MTI Wireless will offset losses from the drop in MTI Wireless' 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 |
| MTI Wireless vs. Diversified Energy | MTI Wireless vs. McEwen Mining | MTI Wireless vs. FC Investment Trust | MTI Wireless vs. Gear4music 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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