Correlation Between Alaska Air and Fluence Energy
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Fluence Energy 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 Fluence Energy 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 Fluence Energy, you can compare the effects of market volatilities on Alaska Air and Fluence Energy 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 Fluence Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Fluence Energy.
Diversification Opportunities for Alaska Air and Fluence Energy
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alaska and Fluence is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Fluence Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluence Energy 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 Fluence Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluence Energy has no effect on the direction of Alaska Air i.e., Alaska Air and Fluence Energy go up and down completely randomly.
Pair Corralation between Alaska Air and Fluence Energy
Considering the 90-day investment horizon Alaska Air Group is expected to generate 0.51 times more return on investment than Fluence Energy. However, Alaska Air Group is 1.97 times less risky than Fluence Energy. It trades about 0.01 of its potential returns per unit of risk. Fluence Energy is currently generating about -0.04 per unit of risk. If you would invest 4,405 in Alaska Air Group on January 12, 2025 and sell it today you would earn a total of 46.00 from holding Alaska Air Group or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Fluence Energy
Performance |
| Timeline |
| Alaska Air Group |
| Fluence Energy |
Alaska Air and Fluence Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Fluence Energy
The main advantage of trading using opposite Alaska Air and Fluence Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Fluence Energy 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 Fluence Energy will offset losses from the drop in Fluence Energy's long position.| Alaska Air vs. Southwest Airlines | Alaska Air vs. JetBlue Airways Corp | Alaska Air vs. United Airlines Holdings | Alaska Air vs. Frontier Group Holdings |
| Fluence Energy vs. Altus Power | Fluence Energy vs. Ormat Technologies | Fluence Energy vs. Enlight Renewable Energy | Fluence Energy vs. Advent Technologies Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stocks Directory Find actively traded stocks across global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |