Correlation Between Alaska Air and Khiron Life
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Khiron Life 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 Khiron Life 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 Khiron Life Sciences, you can compare the effects of market volatilities on Alaska Air and Khiron Life 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 Khiron Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Khiron Life.
Diversification Opportunities for Alaska Air and Khiron Life
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alaska and Khiron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Khiron Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khiron Life Sciences 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 Khiron Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khiron Life Sciences has no effect on the direction of Alaska Air i.e., Alaska Air and Khiron Life go up and down completely randomly.
Pair Corralation between Alaska Air and Khiron Life
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 0.54 times more return on investment than Khiron Life. However, Alaska Air Group is 1.85 times less risky than Khiron Life. It trades about 0.05 of its potential returns per unit of risk. Khiron Life Sciences is currently generating about 0.0 per unit of risk. If you would invest 3,973 in Alaska Air Group on September 20, 2024 and sell it today you would earn a total of 2,041 from holding Alaska Air Group or generate 51.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Khiron Life Sciences
Performance |
| Timeline |
| Alaska Air Group |
| Khiron Life Sciences |
Alaska Air and Khiron Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Khiron Life
The main advantage of trading using opposite Alaska Air and Khiron Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Khiron Life 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 Khiron Life will offset losses from the drop in Khiron Life's long position.| Alaska Air vs. BOSTON BEER A | Alaska Air vs. China Resources Beer | Alaska Air vs. Fevertree Drinks PLC | Alaska Air vs. The Boston Beer |
| Khiron Life vs. Monster Beverage Corp | Khiron Life vs. Air New Zealand | Khiron Life vs. Fevertree Drinks PLC | Khiron Life vs. Alaska Air Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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