Correlation Between Alaska Air and Boyd Gaming
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Boyd Gaming 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 Boyd Gaming 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 Boyd Gaming, you can compare the effects of market volatilities on Alaska Air and Boyd Gaming 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 Boyd Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Boyd Gaming.
Diversification Opportunities for Alaska Air and Boyd Gaming
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alaska and Boyd is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Boyd Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Gaming 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 Boyd Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boyd Gaming has no effect on the direction of Alaska Air i.e., Alaska Air and Boyd Gaming go up and down completely randomly.
Pair Corralation between Alaska Air and Boyd Gaming
Considering the 90-day investment horizon Alaska Air Group is expected to generate 3.84 times more return on investment than Boyd Gaming. However, Alaska Air is 3.84 times more volatile than Boyd Gaming. It trades about 0.27 of its potential returns per unit of risk. Boyd Gaming is currently generating about 0.14 per unit of risk. If you would invest 5,145 in Alaska Air Group on September 13, 2024 and sell it today you would earn a total of 984.00 from holding Alaska Air Group or generate 19.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Boyd Gaming
Performance |
| Timeline |
| Alaska Air Group |
| Boyd Gaming |
Alaska Air and Boyd Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Boyd Gaming
The main advantage of trading using opposite Alaska Air and Boyd Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Boyd Gaming 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 Boyd Gaming will offset losses from the drop in Boyd Gaming's 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 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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