Correlation Between Alaska Air and FlatexDEGIRO
Can any of the company-specific risk be diversified away by investing in both Alaska Air and FlatexDEGIRO 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 FlatexDEGIRO 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 flatexDEGIRO AG, you can compare the effects of market volatilities on Alaska Air and FlatexDEGIRO 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 FlatexDEGIRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and FlatexDEGIRO.
Diversification Opportunities for Alaska Air and FlatexDEGIRO
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alaska and FlatexDEGIRO is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and flatexDEGIRO AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on flatexDEGIRO AG 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 FlatexDEGIRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of flatexDEGIRO AG has no effect on the direction of Alaska Air i.e., Alaska Air and FlatexDEGIRO go up and down completely randomly.
Pair Corralation between Alaska Air and FlatexDEGIRO
Assuming the 90 days trading horizon Alaska Air is expected to generate 1.66 times less return on investment than FlatexDEGIRO. But when comparing it to its historical volatility, Alaska Air Group is 1.06 times less risky than FlatexDEGIRO. It trades about 0.04 of its potential returns per unit of risk. flatexDEGIRO AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 799.00 in flatexDEGIRO AG on October 13, 2024 and sell it today you would earn a total of 725.00 from holding flatexDEGIRO AG or generate 90.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Alaska Air Group vs. flatexDEGIRO AG
Performance |
| Timeline |
| Alaska Air Group |
| flatexDEGIRO AG |
Alaska Air and FlatexDEGIRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and FlatexDEGIRO
The main advantage of trading using opposite Alaska Air and FlatexDEGIRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, FlatexDEGIRO 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 FlatexDEGIRO will offset losses from the drop in FlatexDEGIRO's long position.| Alaska Air vs. MOVIE GAMES SA | Alaska Air vs. MCEWEN MINING INC | Alaska Air vs. Calibre Mining Corp | Alaska Air vs. MAGNUM MINING EXP |
| FlatexDEGIRO vs. SYSTEMAIR AB | FlatexDEGIRO vs. RYANAIR HLDGS ADR | FlatexDEGIRO vs. Alaska Air Group | FlatexDEGIRO vs. Air New Zealand |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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