Correlation Between Alaska Air and Koninklijke Ahold
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By analyzing existing cross correlation between Alaska Air Group and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Alaska Air and Koninklijke Ahold 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 Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Koninklijke Ahold.
Diversification Opportunities for Alaska Air and Koninklijke Ahold
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alaska and Koninklijke is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold 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 Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of Alaska Air i.e., Alaska Air and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Alaska Air and Koninklijke Ahold
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 3.76 times more return on investment than Koninklijke Ahold. However, Alaska Air is 3.76 times more volatile than Koninklijke Ahold Delhaize. It trades about 0.27 of its potential returns per unit of risk. Koninklijke Ahold Delhaize is currently generating about -0.01 per unit of risk. If you would invest 4,843 in Alaska Air Group on September 13, 2024 and sell it today you would earn a total of 959.00 from holding Alaska Air Group or generate 19.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Alaska Air Group |
| Koninklijke Ahold |
Alaska Air and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Koninklijke Ahold
The main advantage of trading using opposite Alaska Air and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Koninklijke Ahold 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 Koninklijke Ahold will offset losses from the drop in Koninklijke Ahold's long position.The idea behind Alaska Air Group and Koninklijke Ahold Delhaize 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.| Koninklijke Ahold vs. EAGLE MATERIALS | Koninklijke Ahold vs. Rayonier Advanced Materials | Koninklijke Ahold vs. SANOK RUBBER ZY | Koninklijke Ahold vs. Sumitomo Rubber Industries |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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