Correlation Between Alaska Air and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Aegean Airlines 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 Aegean Airlines 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 Aegean Airlines SA, you can compare the effects of market volatilities on Alaska Air and Aegean Airlines 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 Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Aegean Airlines.
Diversification Opportunities for Alaska Air and Aegean Airlines
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alaska and Aegean is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA 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 Aegean Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegean Airlines SA has no effect on the direction of Alaska Air i.e., Alaska Air and Aegean Airlines go up and down completely randomly.
Pair Corralation between Alaska Air and Aegean Airlines
Considering the 90-day investment horizon Alaska Air Group is expected to generate 0.93 times more return on investment than Aegean Airlines. However, Alaska Air Group is 1.08 times less risky than Aegean Airlines. It trades about 0.29 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.22 per unit of risk. If you would invest 4,710 in Alaska Air Group on August 28, 2024 and sell it today you would earn a total of 634.00 from holding Alaska Air Group or generate 13.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Aegean Airlines SA
Performance |
| Timeline |
| Alaska Air Group |
| Aegean Airlines SA |
Alaska Air and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Aegean Airlines
The main advantage of trading using opposite Alaska Air and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Aegean Airlines 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 Aegean Airlines will offset losses from the drop in Aegean Airlines' long position.| Alaska Air vs. Delta Air Lines | Alaska Air vs. United Airlines Holdings | Alaska Air vs. American Airlines Group | Alaska Air vs. JetBlue Airways Corp |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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