Correlation Between Axfood AB and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Axfood AB 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 Axfood AB and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axfood AB and Alaska Air Group, you can compare the effects of market volatilities on Axfood AB 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 Axfood AB with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axfood AB and Alaska Air.
Diversification Opportunities for Axfood AB and Alaska Air
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axfood and Alaska is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Axfood AB 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 Axfood AB 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 Axfood AB 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 Axfood AB i.e., Axfood AB and Alaska Air go up and down completely randomly.
Pair Corralation between Axfood AB and Alaska Air
Assuming the 90 days trading horizon Axfood AB is expected to under-perform the Alaska Air. But the stock apears to be less risky and, when comparing its historical volatility, Axfood AB is 1.41 times less risky than Alaska Air. The stock trades about -0.01 of its potential returns per unit of risk. The Alaska Air Group is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 6,460 in Alaska Air Group on November 7, 2024 and sell it today you would earn a total of 1,104 from holding Alaska Air Group or generate 17.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axfood AB vs. Alaska Air Group
Performance |
| Timeline |
| Axfood AB |
| Alaska Air Group |
Axfood AB and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axfood AB and Alaska Air
The main advantage of trading using opposite Axfood AB and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axfood AB 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.| Axfood AB vs. MyHealthChecked Plc | Axfood AB vs. Sealed Air Corp | Axfood AB vs. UNIQA Insurance Group | Axfood AB vs. Primary Health Properties |
| Alaska Air vs. Empire Metals Limited | Alaska Air vs. Endeavour Mining Corp | Alaska Air vs. Medical Properties Trust | Alaska Air vs. Jacquet Metal Service |
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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