Correlation Between Alaska Air and REDSUN PROPERTIES
Can any of the company-specific risk be diversified away by investing in both Alaska Air and REDSUN PROPERTIES 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 REDSUN PROPERTIES 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 REDSUN PROPERTIES GROUP, you can compare the effects of market volatilities on Alaska Air and REDSUN PROPERTIES 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 REDSUN PROPERTIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and REDSUN PROPERTIES.
Diversification Opportunities for Alaska Air and REDSUN PROPERTIES
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alaska and REDSUN is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and REDSUN PROPERTIES GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REDSUN PROPERTIES 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 REDSUN PROPERTIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REDSUN PROPERTIES has no effect on the direction of Alaska Air i.e., Alaska Air and REDSUN PROPERTIES go up and down completely randomly.
Pair Corralation between Alaska Air and REDSUN PROPERTIES
Assuming the 90 days trading horizon Alaska Air is expected to generate 2.98 times less return on investment than REDSUN PROPERTIES. But when comparing it to its historical volatility, Alaska Air Group is 8.89 times less risky than REDSUN PROPERTIES. It trades about 0.41 of its potential returns per unit of risk. REDSUN PROPERTIES GROUP is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.20 in REDSUN PROPERTIES GROUP on November 6, 2024 and sell it today you would earn a total of 0.05 from holding REDSUN PROPERTIES GROUP or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Alaska Air Group vs. REDSUN PROPERTIES GROUP
Performance |
| Timeline |
| Alaska Air Group |
| REDSUN PROPERTIES |
Alaska Air and REDSUN PROPERTIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and REDSUN PROPERTIES
The main advantage of trading using opposite Alaska Air and REDSUN PROPERTIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, REDSUN PROPERTIES 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 REDSUN PROPERTIES will offset losses from the drop in REDSUN PROPERTIES's long position.| Alaska Air vs. PLAYTECH | Alaska Air vs. ePlay Digital | Alaska Air vs. TRAVEL LEISURE DL 01 | Alaska Air vs. SIEM OFFSHORE NEW |
| REDSUN PROPERTIES vs. China Resources Land | REDSUN PROPERTIES vs. SEAZEN GROUP LTD | REDSUN PROPERTIES vs. Atrium Ljungberg AB | REDSUN PROPERTIES vs. GANGLONG CHINA PRGRLTD |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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