Correlation Between Alaska Air and BTU Metals
Can any of the company-specific risk be diversified away by investing in both Alaska Air and BTU Metals 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 BTU Metals 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 BTU Metals Corp, you can compare the effects of market volatilities on Alaska Air and BTU Metals 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 BTU Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and BTU Metals.
Diversification Opportunities for Alaska Air and BTU Metals
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alaska and BTU is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and BTU Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTU Metals Corp 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 BTU Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTU Metals Corp has no effect on the direction of Alaska Air i.e., Alaska Air and BTU Metals go up and down completely randomly.
Pair Corralation between Alaska Air and BTU Metals
Considering the 90-day investment horizon Alaska Air Group is expected to generate 1.39 times more return on investment than BTU Metals. However, Alaska Air is 1.39 times more volatile than BTU Metals Corp. It trades about 0.22 of its potential returns per unit of risk. BTU Metals Corp is currently generating about 0.21 per unit of risk. If you would invest 4,791 in Alaska Air Group on September 1, 2024 and sell it today you would earn a total of 469.00 from holding Alaska Air Group or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Alaska Air Group vs. BTU Metals Corp
Performance |
| Timeline |
| Alaska Air Group |
| BTU Metals Corp |
Alaska Air and BTU Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and BTU Metals
The main advantage of trading using opposite Alaska Air and BTU Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, BTU Metals 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 BTU Metals will offset losses from the drop in BTU Metals' long position.| Alaska Air vs. Canadian Pacific Railway | Alaska Air vs. Volaris | Alaska Air vs. Werner Enterprises | Alaska Air vs. Canadian National Railway |
| BTU Metals vs. Alaska Air Group | BTU Metals vs. Xtant Medical Holdings | BTU Metals vs. Westinghouse Air Brake | BTU Metals vs. AerSale Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |