Correlation Between Gaztransport and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Alaska Air 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 Gaztransport and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport et Technigaz and Alaska Air Group, you can compare the effects of market volatilities on Gaztransport and Alaska Air 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 Gaztransport with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Alaska Air.
Diversification Opportunities for Gaztransport and Alaska Air
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gaztransport and Alaska is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Alaska Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Air Group and Gaztransport 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 Gaztransport et Technigaz are associated (or correlated) with Alaska Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Air Group has no effect on the direction of Gaztransport i.e., Gaztransport and Alaska Air go up and down completely randomly.
Pair Corralation between Gaztransport and Alaska Air
Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 0.75 times more return on investment than Alaska Air. However, Gaztransport et Technigaz is 1.33 times less risky than Alaska Air. It trades about 0.05 of its potential returns per unit of risk. Alaska Air Group is currently generating about 0.02 per unit of risk. If you would invest 9,714 in Gaztransport et Technigaz on September 3, 2024 and sell it today you would earn a total of 4,076 from holding Gaztransport et Technigaz or generate 41.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. Alaska Air Group
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Alaska Air Group |
Gaztransport and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Alaska Air
The main advantage of trading using opposite Gaztransport and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Alaska Air 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 Alaska Air will offset losses from the drop in Alaska Air's long position.| Gaztransport vs. Cairo Communication SpA | Gaztransport vs. Lundin Mining Corp | Gaztransport vs. Zegona Communications Plc | Gaztransport vs. Greenroc Mining PLC |
| Alaska Air vs. Global Net Lease | Alaska Air vs. EVS Broadcast Equipment | Alaska Air vs. Amedeo Air Four | Alaska Air vs. Lindsell Train Investment |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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