Correlation Between Alaska Air and QUEEN S
Can any of the company-specific risk be diversified away by investing in both Alaska Air and QUEEN S 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 QUEEN S 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 QUEEN S ROAD, you can compare the effects of market volatilities on Alaska Air and QUEEN S 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 QUEEN S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and QUEEN S.
Diversification Opportunities for Alaska Air and QUEEN S
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alaska and QUEEN is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and QUEEN S ROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUEEN S ROAD 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 QUEEN S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUEEN S ROAD has no effect on the direction of Alaska Air i.e., Alaska Air and QUEEN S go up and down completely randomly.
Pair Corralation between Alaska Air and QUEEN S
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 0.66 times more return on investment than QUEEN S. However, Alaska Air Group is 1.53 times less risky than QUEEN S. It trades about 0.3 of its potential returns per unit of risk. QUEEN S ROAD is currently generating about -0.03 per unit of risk. If you would invest 4,364 in Alaska Air Group on August 28, 2024 and sell it today you would earn a total of 702.00 from holding Alaska Air Group or generate 16.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. QUEEN S ROAD
Performance |
| Timeline |
| Alaska Air Group |
| QUEEN S ROAD |
Alaska Air and QUEEN S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and QUEEN S
The main advantage of trading using opposite Alaska Air and QUEEN S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, QUEEN S 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 QUEEN S will offset losses from the drop in QUEEN S's long position.The idea behind Alaska Air Group and QUEEN S ROAD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| QUEEN S vs. Information Services International Dentsu | QUEEN S vs. Cleanaway Waste Management | QUEEN S vs. Q2M Managementberatung AG | QUEEN S vs. AGF Management Limited |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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