Correlation Between Allegiant Travel and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both Allegiant Travel and Beyond Meat 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 Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegiant Travel and Beyond Meat, you can compare the effects of market volatilities on Allegiant Travel and Beyond Meat 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 Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegiant Travel and Beyond Meat.
Diversification Opportunities for Allegiant Travel and Beyond Meat
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Allegiant and Beyond is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Allegiant Travel and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat 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 Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of Allegiant Travel i.e., Allegiant Travel and Beyond Meat go up and down completely randomly.
Pair Corralation between Allegiant Travel and Beyond Meat
Given the investment horizon of 90 days Allegiant Travel is expected to generate 0.86 times more return on investment than Beyond Meat. However, Allegiant Travel is 1.16 times less risky than Beyond Meat. It trades about 0.27 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.19 per unit of risk. If you would invest 6,596 in Allegiant Travel on September 4, 2024 and sell it today you would earn a total of 1,481 from holding Allegiant Travel or generate 22.45% 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. Beyond Meat
Performance |
| Timeline |
| Allegiant Travel |
| Beyond Meat |
Allegiant Travel and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegiant Travel and Beyond Meat
The main advantage of trading using opposite Allegiant Travel and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegiant Travel position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat's long position.| Allegiant Travel vs. Delta Air Lines | Allegiant Travel vs. United Airlines Holdings | Allegiant Travel vs. Frontier Group Holdings |
| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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