Correlation Between Alaska Air and SIDETRADE
Can any of the company-specific risk be diversified away by investing in both Alaska Air and SIDETRADE 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 SIDETRADE 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 SIDETRADE EO 1, you can compare the effects of market volatilities on Alaska Air and SIDETRADE 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 SIDETRADE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and SIDETRADE.
Diversification Opportunities for Alaska Air and SIDETRADE
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alaska and SIDETRADE is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and SIDETRADE EO 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIDETRADE EO 1 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 SIDETRADE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIDETRADE EO 1 has no effect on the direction of Alaska Air i.e., Alaska Air and SIDETRADE go up and down completely randomly.
Pair Corralation between Alaska Air and SIDETRADE
Assuming the 90 days trading horizon Alaska Air is expected to generate 1.08 times less return on investment than SIDETRADE. In addition to that, Alaska Air is 1.09 times more volatile than SIDETRADE EO 1. It trades about 0.05 of its total potential returns per unit of risk. SIDETRADE EO 1 is currently generating about 0.06 per unit of volatility. If you would invest 15,350 in SIDETRADE EO 1 on November 6, 2024 and sell it today you would earn a total of 9,650 from holding SIDETRADE EO 1 or generate 62.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. SIDETRADE EO 1
Performance |
| Timeline |
| Alaska Air Group |
| SIDETRADE EO 1 |
Alaska Air and SIDETRADE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and SIDETRADE
The main advantage of trading using opposite Alaska Air and SIDETRADE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, SIDETRADE 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 SIDETRADE will offset losses from the drop in SIDETRADE'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 |
| SIDETRADE vs. SYSTEMAIR AB | SIDETRADE vs. Wizz Air Holdings | SIDETRADE vs. TFS FINANCIAL | SIDETRADE vs. Erste Group Bank |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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