Correlation Between Alaska Air and Greif,
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Greif, 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 Greif, 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 Greif, Inc, you can compare the effects of market volatilities on Alaska Air and Greif, 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 Greif,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Greif,.
Diversification Opportunities for Alaska Air and Greif,
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alaska and Greif, is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Greif, Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greif, 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 Greif,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greif, Inc has no effect on the direction of Alaska Air i.e., Alaska Air and Greif, go up and down completely randomly.
Pair Corralation between Alaska Air and Greif,
Considering the 90-day investment horizon Alaska Air Group is expected to generate 1.31 times more return on investment than Greif,. However, Alaska Air is 1.31 times more volatile than Greif, Inc. It trades about 0.12 of its potential returns per unit of risk. Greif, Inc is currently generating about 0.11 per unit of risk. If you would invest 4,074 in Alaska Air Group on September 5, 2024 and sell it today you would earn a total of 1,367 from holding Alaska Air Group or generate 33.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Greif, Inc
Performance |
| Timeline |
| Alaska Air Group |
| Greif, Inc |
Alaska Air and Greif, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Greif,
The main advantage of trading using opposite Alaska Air and Greif, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Greif, 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 Greif, will offset losses from the drop in Greif,'s long position.The idea behind Alaska Air Group and Greif, Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Greif, vs. Kenon Holdings | Greif, vs. One Gas | Greif, vs. Transportadora de Gas | Greif, vs. Alaska Air Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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