Correlation Between Alaska Air and Funko
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Funko 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 Funko 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 Funko Inc, you can compare the effects of market volatilities on Alaska Air and Funko 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 Funko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Funko.
Diversification Opportunities for Alaska Air and Funko
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alaska and Funko is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc 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 Funko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Funko Inc has no effect on the direction of Alaska Air i.e., Alaska Air and Funko go up and down completely randomly.
Pair Corralation between Alaska Air and Funko
Considering the 90-day investment horizon Alaska Air Group is expected to generate 0.96 times more return on investment than Funko. However, Alaska Air Group is 1.05 times less risky than Funko. It trades about 0.28 of its potential returns per unit of risk. Funko Inc is currently generating about 0.02 per unit of risk. If you would invest 3,995 in Alaska Air Group on September 12, 2024 and sell it today you would earn a total of 2,134 from holding Alaska Air Group or generate 53.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Funko Inc
Performance |
| Timeline |
| Alaska Air Group |
| Funko Inc |
Alaska Air and Funko Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Funko
The main advantage of trading using opposite Alaska Air and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Funko 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 Funko will offset losses from the drop in Funko'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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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