Correlation Between Alaska Air and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Genco Shipping 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 Genco Shipping 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 Genco Shipping Trading, you can compare the effects of market volatilities on Alaska Air and Genco Shipping 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 Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Genco Shipping.
Diversification Opportunities for Alaska Air and Genco Shipping
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alaska and Genco is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Genco Shipping Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genco Shipping Trading 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 Genco Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genco Shipping Trading has no effect on the direction of Alaska Air i.e., Alaska Air and Genco Shipping go up and down completely randomly.
Pair Corralation between Alaska Air and Genco Shipping
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 0.59 times more return on investment than Genco Shipping. However, Alaska Air Group is 1.71 times less risky than Genco Shipping. It trades about 0.48 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.01 per unit of risk. If you would invest 6,198 in Alaska Air Group on November 7, 2024 and sell it today you would earn a total of 1,074 from holding Alaska Air Group or generate 17.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Alaska Air Group vs. Genco Shipping Trading
Performance |
| Timeline |
| Alaska Air Group |
| Genco Shipping Trading |
Alaska Air and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Genco Shipping
The main advantage of trading using opposite Alaska Air and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Genco Shipping 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 Genco Shipping will offset losses from the drop in Genco Shipping's long position.| Alaska Air vs. CN DATANG C | Alaska Air vs. Fidelity National Information | Alaska Air vs. DATADOT TECHNOLOGY | Alaska Air vs. Teradata Corp |
| Genco Shipping vs. BANKINTER ADR 2007 | Genco Shipping vs. Alfa Financial Software | Genco Shipping vs. COREBRIDGE FINANCIAL INC | Genco Shipping vs. CHIBA BANK |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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