Correlation Between Alaska Air and SupplyMe Capital
Can any of the company-specific risk be diversified away by investing in both Alaska Air and SupplyMe Capital 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 SupplyMe Capital 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 SupplyMe Capital PLC, you can compare the effects of market volatilities on Alaska Air and SupplyMe Capital 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 SupplyMe Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and SupplyMe Capital.
Diversification Opportunities for Alaska Air and SupplyMe Capital
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alaska and SupplyMe is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and SupplyMe Capital PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SupplyMe Capital 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 SupplyMe Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SupplyMe Capital PLC has no effect on the direction of Alaska Air i.e., Alaska Air and SupplyMe Capital go up and down completely randomly.
Pair Corralation between Alaska Air and SupplyMe Capital
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 0.3 times more return on investment than SupplyMe Capital. However, Alaska Air Group is 3.38 times less risky than SupplyMe Capital. It trades about 0.09 of its potential returns per unit of risk. SupplyMe Capital PLC is currently generating about -0.1 per unit of risk. If you would invest 3,273 in Alaska Air Group on September 1, 2024 and sell it today you would earn a total of 1,992 from holding Alaska Air Group or generate 60.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.91% |
| Values | Daily Returns |
Alaska Air Group vs. SupplyMe Capital PLC
Performance |
| Timeline |
| Alaska Air Group |
| SupplyMe Capital PLC |
Alaska Air and SupplyMe Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and SupplyMe Capital
The main advantage of trading using opposite Alaska Air and SupplyMe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, SupplyMe Capital 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 SupplyMe Capital will offset losses from the drop in SupplyMe Capital's long position.| Alaska Air vs. Solstad Offshore ASA | Alaska Air vs. Samsung Electronics Co | Alaska Air vs. Gaztransport et Technigaz | Alaska Air vs. European Metals Holdings |
| SupplyMe Capital vs. Associated British Foods | SupplyMe Capital vs. Ecofin Global Utilities | SupplyMe Capital vs. Austevoll Seafood ASA | SupplyMe Capital vs. Spirent Communications 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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