Correlation Between Allegiant Travel and Air France
Can any of the company-specific risk be diversified away by investing in both Allegiant Travel and Air France 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 Allegiant Travel and Air France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegiant Travel and Air France KLM, you can compare the effects of market volatilities on Allegiant Travel and Air France 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 Allegiant Travel with a short position of Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegiant Travel and Air France.
Diversification Opportunities for Allegiant Travel and Air France
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Allegiant and Air is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Allegiant Travel and Air France KLM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM and Allegiant Travel 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 Allegiant Travel are associated (or correlated) with Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of Allegiant Travel i.e., Allegiant Travel and Air France go up and down completely randomly.
Pair Corralation between Allegiant Travel and Air France
Given the investment horizon of 90 days Allegiant Travel is expected to generate 1.28 times more return on investment than Air France. However, Allegiant Travel is 1.28 times more volatile than Air France KLM. It trades about 0.04 of its potential returns per unit of risk. Air France KLM is currently generating about -0.05 per unit of risk. If you would invest 7,284 in Allegiant Travel on November 9, 2024 and sell it today you would earn a total of 1,645 from holding Allegiant Travel or generate 22.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegiant Travel vs. Air France KLM
Performance |
| Timeline |
| Allegiant Travel |
| Air France KLM |
Allegiant Travel and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegiant Travel and Air France
The main advantage of trading using opposite Allegiant Travel and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegiant Travel position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.| Allegiant Travel vs. Azul SA | Allegiant Travel vs. Alaska Air Group | Allegiant Travel vs. International Consolidated Airlines | Allegiant Travel vs. Sun Country Airlines |
| Air France vs. International Consolidated Airlines | Air France vs. Air France KLM SA | Air France vs. Finnair Oyj | Air France vs. AirAsia Group Berhad |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |