Correlation Between Alaska Air and AP Mller
Can any of the company-specific risk be diversified away by investing in both Alaska Air and AP Mller 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 AP Mller 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 AP Mller , you can compare the effects of market volatilities on Alaska Air and AP Mller 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 AP Mller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and AP Mller.
Diversification Opportunities for Alaska Air and AP Mller
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alaska and DP4B is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Mller 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 AP Mller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Mller has no effect on the direction of Alaska Air i.e., Alaska Air and AP Mller go up and down completely randomly.
Pair Corralation between Alaska Air and AP Mller
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 0.58 times more return on investment than AP Mller. However, Alaska Air Group is 1.72 times less risky than AP Mller. It trades about 0.05 of its potential returns per unit of risk. AP Mller is currently generating about 0.02 per unit of risk. If you would invest 4,648 in Alaska Air Group on November 5, 2024 and sell it today you would earn a total of 2,414 from holding Alaska Air Group or generate 51.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Alaska Air Group vs. AP Mller
Performance |
| Timeline |
| Alaska Air Group |
| AP Mller |
Alaska Air and AP Mller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and AP Mller
The main advantage of trading using opposite Alaska Air and AP Mller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, AP Mller 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 AP Mller will offset losses from the drop in AP Mller's long position.| Alaska Air vs. ANTA SPORTS PRODUCT | Alaska Air vs. LG Display Co | Alaska Air vs. COLUMBIA SPORTSWEAR | Alaska Air vs. ARISTOCRAT LEISURE |
| AP Mller vs. Cal Maine Foods | AP Mller vs. Tyson Foods | AP Mller vs. INVITATION HOMES DL | AP Mller vs. PATTIES FOODS |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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