Correlation Between Allegiant Travel and Tootsie Roll
Can any of the company-specific risk be diversified away by investing in both Allegiant Travel and Tootsie Roll 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 Tootsie Roll into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegiant Travel and Tootsie Roll Industries, you can compare the effects of market volatilities on Allegiant Travel and Tootsie Roll 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 Tootsie Roll. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegiant Travel and Tootsie Roll.
Diversification Opportunities for Allegiant Travel and Tootsie Roll
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Allegiant and Tootsie is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Allegiant Travel and Tootsie Roll Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tootsie Roll Industries 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 Tootsie Roll. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tootsie Roll Industries has no effect on the direction of Allegiant Travel i.e., Allegiant Travel and Tootsie Roll go up and down completely randomly.
Pair Corralation between Allegiant Travel and Tootsie Roll
Given the investment horizon of 90 days Allegiant Travel is expected to generate 2.27 times more return on investment than Tootsie Roll. However, Allegiant Travel is 2.27 times more volatile than Tootsie Roll Industries. It trades about 0.03 of its potential returns per unit of risk. Tootsie Roll Industries is currently generating about -0.02 per unit of risk. If you would invest 7,066 in Allegiant Travel on September 3, 2024 and sell it today you would earn a total of 1,118 from holding Allegiant Travel or generate 15.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegiant Travel vs. Tootsie Roll Industries
Performance |
| Timeline |
| Allegiant Travel |
| Tootsie Roll Industries |
Allegiant Travel and Tootsie Roll Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegiant Travel and Tootsie Roll
The main advantage of trading using opposite Allegiant Travel and Tootsie Roll positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegiant Travel position performs unexpectedly, Tootsie Roll 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 Tootsie Roll will offset losses from the drop in Tootsie Roll's long position.| Allegiant Travel vs. JetBlue Airways Corp | Allegiant Travel vs. Copa Holdings SA | Allegiant Travel vs. SkyWest | Allegiant Travel vs. Air Transport Services |
| Tootsie Roll vs. Mondelez International | Tootsie Roll vs. Hershey Co | Tootsie Roll vs. Rocky Mountain Chocolate | Tootsie Roll vs. Chocoladefabriken Lindt Sprngli |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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