Correlation Between Alaska Air and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Alaska Air and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Samsung Electronics.
Diversification Opportunities for Alaska Air and Samsung Electronics
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alaska and Samsung is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Alaska Air i.e., Alaska Air and Samsung Electronics go up and down completely randomly.
Pair Corralation between Alaska Air and Samsung Electronics
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 1.14 times more return on investment than Samsung Electronics. However, Alaska Air is 1.14 times more volatile than Samsung Electronics Co. It trades about 0.14 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.08 per unit of risk. If you would invest 3,712 in Alaska Air Group on November 5, 2024 and sell it today you would earn a total of 3,507 from holding Alaska Air Group or generate 94.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.81% |
| Values | Daily Returns |
Alaska Air Group vs. Samsung Electronics Co
Performance |
| Timeline |
| Alaska Air Group |
| Samsung Electronics |
Alaska Air and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Samsung Electronics
The main advantage of trading using opposite Alaska Air and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Alaska Air vs. GlobalData PLC | Alaska Air vs. Extra Space Storage | Alaska Air vs. Datagroup SE | Alaska Air vs. Alliance Data Systems |
| Samsung Electronics vs. Gamma Communications PLC | Samsung Electronics vs. Hilton Food Group | Samsung Electronics vs. Trainline Plc | Samsung Electronics vs. Ebro Foods |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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