Correlation Between Alaska Air and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Playtech 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 Playtech 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 Playtech Plc, you can compare the effects of market volatilities on Alaska Air and Playtech 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 Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Playtech Plc.
Diversification Opportunities for Alaska Air and Playtech Plc
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alaska and Playtech is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Playtech Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech 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 Playtech Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtech Plc has no effect on the direction of Alaska Air i.e., Alaska Air and Playtech Plc go up and down completely randomly.
Pair Corralation between Alaska Air and Playtech Plc
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 1.23 times more return on investment than Playtech Plc. However, Alaska Air is 1.23 times more volatile than Playtech Plc. It trades about 0.41 of its potential returns per unit of risk. Playtech Plc is currently generating about 0.11 per unit of risk. If you would invest 6,404 in Alaska Air Group on November 3, 2024 and sell it today you would earn a total of 1,019 from holding Alaska Air Group or generate 15.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Playtech Plc
Performance |
| Timeline |
| Alaska Air Group |
| Playtech Plc |
Alaska Air and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Playtech Plc
The main advantage of trading using opposite Alaska Air and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Playtech 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 Playtech Plc will offset losses from the drop in Playtech Plc's long position.| Alaska Air vs. Sovereign Metals | Alaska Air vs. Europa Metals | Alaska Air vs. Alfa Financial Software | Alaska Air vs. Sabien Technology Group |
| Playtech Plc vs. American Homes 4 | Playtech Plc vs. Take Two Interactive Software | Playtech Plc vs. bet at home AG | Playtech Plc vs. Axway Software SA |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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