Correlation Between Alaska Air and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Evolution 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 Evolution 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 Evolution Gaming Group, you can compare the effects of market volatilities on Alaska Air and Evolution 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 Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Evolution Gaming.
Diversification Opportunities for Alaska Air and Evolution Gaming
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alaska and Evolution is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution 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 Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of Alaska Air i.e., Alaska Air and Evolution Gaming go up and down completely randomly.
Pair Corralation between Alaska Air and Evolution Gaming
Considering the 90-day investment horizon Alaska Air Group is expected to generate 1.71 times more return on investment than Evolution Gaming. However, Alaska Air is 1.71 times more volatile than Evolution Gaming Group. It trades about 0.24 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.14 per unit of risk. If you would invest 4,727 in Alaska Air Group on August 31, 2024 and sell it today you would earn a total of 541.00 from holding Alaska Air Group or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Evolution Gaming Group
Performance |
| Timeline |
| Alaska Air Group |
| Evolution Gaming |
Alaska Air and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Evolution Gaming
The main advantage of trading using opposite Alaska Air and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Evolution 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 Evolution Gaming will offset losses from the drop in Evolution Gaming's long position.| Alaska Air vs. JetBlue Airways Corp | Alaska Air vs. Allegiant Travel | Alaska Air vs. SkyWest | Alaska Air vs. Air Transport Services |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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