Correlation Between Alaska Air and HOCHSCHILD MINING
Can any of the company-specific risk be diversified away by investing in both Alaska Air and HOCHSCHILD MINING 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 HOCHSCHILD MINING 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 HOCHSCHILD MINING, you can compare the effects of market volatilities on Alaska Air and HOCHSCHILD MINING 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 HOCHSCHILD MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and HOCHSCHILD MINING.
Diversification Opportunities for Alaska Air and HOCHSCHILD MINING
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alaska and HOCHSCHILD is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and HOCHSCHILD MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOCHSCHILD MINING 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 HOCHSCHILD MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOCHSCHILD MINING has no effect on the direction of Alaska Air i.e., Alaska Air and HOCHSCHILD MINING go up and down completely randomly.
Pair Corralation between Alaska Air and HOCHSCHILD MINING
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 0.75 times more return on investment than HOCHSCHILD MINING. However, Alaska Air Group is 1.33 times less risky than HOCHSCHILD MINING. It trades about 0.2 of its potential returns per unit of risk. HOCHSCHILD MINING is currently generating about -0.02 per unit of risk. If you would invest 4,511 in Alaska Air Group on September 2, 2024 and sell it today you would earn a total of 466.00 from holding Alaska Air Group or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. HOCHSCHILD MINING
Performance |
| Timeline |
| Alaska Air Group |
| HOCHSCHILD MINING |
Alaska Air and HOCHSCHILD MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and HOCHSCHILD MINING
The main advantage of trading using opposite Alaska Air and HOCHSCHILD MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, HOCHSCHILD MINING 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 HOCHSCHILD MINING will offset losses from the drop in HOCHSCHILD MINING's long position.| Alaska Air vs. MHP Hotel AG | Alaska Air vs. COVIVIO HOTELS INH | Alaska Air vs. Solstad Offshore ASA | Alaska Air vs. Burlington Stores |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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