Correlation Between Alaska Air and Apple
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Alaska Air and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Apple.
Diversification Opportunities for Alaska Air and Apple
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alaska and Apple is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Alaska Air i.e., Alaska Air and Apple go up and down completely randomly.
Pair Corralation between Alaska Air and Apple
Assuming the 90 days trading horizon Alaska Air is expected to generate 1.49 times less return on investment than Apple. In addition to that, Alaska Air is 1.69 times more volatile than Apple Inc. It trades about 0.04 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.1 per unit of volatility. If you would invest 12,528 in Apple Inc on October 11, 2024 and sell it today you would earn a total of 10,922 from holding Apple Inc or generate 87.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Apple Inc
Performance |
| Timeline |
| Alaska Air Group |
| Apple Inc |
Alaska Air and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Apple
The main advantage of trading using opposite Alaska Air and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Alaska Air vs. 24SEVENOFFICE GROUP AB | Alaska Air vs. Rocket Internet SE | Alaska Air vs. NURAN WIRELESS INC | Alaska Air vs. Infrastrutture Wireless Italiane |
| Apple vs. Flowers Foods | Apple vs. Altair Engineering | Apple vs. Alaska Air Group | Apple vs. INDOFOOD AGRI RES |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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