Correlation Between Alaska Air and Centrais Eltricas
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Centrais Eltricas 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 Centrais Eltricas 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 Centrais Eltricas Brasileiras, you can compare the effects of market volatilities on Alaska Air and Centrais Eltricas 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 Centrais Eltricas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Centrais Eltricas.
Diversification Opportunities for Alaska Air and Centrais Eltricas
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alaska and Centrais is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group, and Centrais Eltricas Brasileiras in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrais Eltricas 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 Centrais Eltricas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrais Eltricas has no effect on the direction of Alaska Air i.e., Alaska Air and Centrais Eltricas go up and down completely randomly.
Pair Corralation between Alaska Air and Centrais Eltricas
Assuming the 90 days trading horizon Alaska Air Group, is expected to generate 5.25 times more return on investment than Centrais Eltricas. However, Alaska Air is 5.25 times more volatile than Centrais Eltricas Brasileiras. It trades about 0.2 of its potential returns per unit of risk. Centrais Eltricas Brasileiras is currently generating about 0.0 per unit of risk. If you would invest 34,066 in Alaska Air Group, on October 20, 2024 and sell it today you would earn a total of 6,544 from holding Alaska Air Group, or generate 19.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Alaska Air Group, vs. Centrais Eltricas Brasileiras
Performance |
| Timeline |
| Alaska Air Group, |
| Centrais Eltricas |
Alaska Air and Centrais Eltricas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Centrais Eltricas
The main advantage of trading using opposite Alaska Air and Centrais Eltricas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Centrais Eltricas 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 Centrais Eltricas will offset losses from the drop in Centrais Eltricas' long position.| Alaska Air vs. The Home Depot | Alaska Air vs. Hormel Foods | Alaska Air vs. Brpr Corporate Offices | Alaska Air vs. Molson Coors Beverage |
| Centrais Eltricas vs. Alaska Air Group, | Centrais Eltricas vs. Ryanair Holdings plc | Centrais Eltricas vs. Metalrgica Riosulense SA | Centrais Eltricas vs. British American Tobacco |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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