Correlation Between Alaska Air and CAREER EDUCATION
Can any of the company-specific risk be diversified away by investing in both Alaska Air and CAREER EDUCATION 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 CAREER EDUCATION 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 CAREER EDUCATION, you can compare the effects of market volatilities on Alaska Air and CAREER EDUCATION 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 CAREER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and CAREER EDUCATION.
Diversification Opportunities for Alaska Air and CAREER EDUCATION
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alaska and CAREER is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and CAREER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAREER EDUCATION 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 CAREER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAREER EDUCATION has no effect on the direction of Alaska Air i.e., Alaska Air and CAREER EDUCATION go up and down completely randomly.
Pair Corralation between Alaska Air and CAREER EDUCATION
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 0.88 times more return on investment than CAREER EDUCATION. However, Alaska Air Group is 1.14 times less risky than CAREER EDUCATION. It trades about 0.3 of its potential returns per unit of risk. CAREER EDUCATION is currently generating about 0.16 per unit of risk. If you would invest 3,241 in Alaska Air Group on September 3, 2024 and sell it today you would earn a total of 1,736 from holding Alaska Air Group or generate 53.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. CAREER EDUCATION
Performance |
| Timeline |
| Alaska Air Group |
| CAREER EDUCATION |
Alaska Air and CAREER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and CAREER EDUCATION
The main advantage of trading using opposite Alaska Air and CAREER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, CAREER EDUCATION 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 CAREER EDUCATION will offset losses from the drop in CAREER EDUCATION's long position.| Alaska Air vs. Zijin Mining Group | Alaska Air vs. Jacquet Metal Service | Alaska Air vs. Western Copper and | Alaska Air vs. United Airlines Holdings |
| CAREER EDUCATION vs. CARSALESCOM | CAREER EDUCATION vs. REVO INSURANCE SPA | CAREER EDUCATION vs. The Hanover Insurance | CAREER EDUCATION vs. GRUPO CARSO A1 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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