Correlation Between Alaska Air and Astral Foods
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Astral Foods 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 Astral Foods 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 Astral Foods Limited, you can compare the effects of market volatilities on Alaska Air and Astral Foods 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 Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Astral Foods.
Diversification Opportunities for Alaska Air and Astral Foods
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alaska and Astral is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Astral Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods Limited 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 Astral Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Foods Limited has no effect on the direction of Alaska Air i.e., Alaska Air and Astral Foods go up and down completely randomly.
Pair Corralation between Alaska Air and Astral Foods
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 1.41 times more return on investment than Astral Foods. However, Alaska Air is 1.41 times more volatile than Astral Foods Limited. It trades about 0.23 of its potential returns per unit of risk. Astral Foods Limited is currently generating about 0.01 per unit of risk. If you would invest 4,041 in Alaska Air Group on August 30, 2024 and sell it today you would earn a total of 928.00 from holding Alaska Air Group or generate 22.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Astral Foods Limited
Performance |
| Timeline |
| Alaska Air Group |
| Astral Foods Limited |
Alaska Air and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Astral Foods
The main advantage of trading using opposite Alaska Air and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Astral Foods 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 Astral Foods will offset losses from the drop in Astral Foods' long position.The idea behind Alaska Air Group and Astral Foods Limited 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.| Astral Foods vs. Tyson Foods | Astral Foods vs. SalMar ASA | Astral Foods vs. Superior Plus Corp | Astral Foods vs. SIVERS SEMICONDUCTORS AB |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |