Correlation Between Alaska Air and Zegona Communications
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Zegona Communications 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 Zegona Communications 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 Zegona Communications Plc, you can compare the effects of market volatilities on Alaska Air and Zegona Communications 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 Zegona Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Zegona Communications.
Diversification Opportunities for Alaska Air and Zegona Communications
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alaska and Zegona is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Zegona Communications Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zegona Communications 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 Zegona Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zegona Communications Plc has no effect on the direction of Alaska Air i.e., Alaska Air and Zegona Communications go up and down completely randomly.
Pair Corralation between Alaska Air and Zegona Communications
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 1.24 times more return on investment than Zegona Communications. However, Alaska Air is 1.24 times more volatile than Zegona Communications Plc. It trades about 0.26 of its potential returns per unit of risk. Zegona Communications Plc is currently generating about 0.15 per unit of risk. If you would invest 5,187 in Alaska Air Group on September 12, 2024 and sell it today you would earn a total of 901.00 from holding Alaska Air Group or generate 17.37% 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. Zegona Communications Plc
Performance |
| Timeline |
| Alaska Air Group |
| Zegona Communications Plc |
Alaska Air and Zegona Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Zegona Communications
The main advantage of trading using opposite Alaska Air and Zegona Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Zegona Communications 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 Zegona Communications will offset losses from the drop in Zegona Communications' long position.| Alaska Air vs. Hong Kong Land | Alaska Air vs. Neometals | Alaska Air vs. Coor Service Management | Alaska Air vs. Fidelity Sustainable USD |
| Zegona Communications vs. Catalyst Media Group | Zegona Communications vs. CATLIN GROUP | Zegona Communications vs. Tamburi Investment Partners | Zegona Communications vs. Magnora ASA |
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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