Correlation Between Alaska Air and Getty Realty
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Getty Realty 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 Getty Realty 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 Getty Realty, you can compare the effects of market volatilities on Alaska Air and Getty Realty 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 Getty Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Getty Realty.
Diversification Opportunities for Alaska Air and Getty Realty
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alaska and Getty is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Getty Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Realty 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 Getty Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Realty has no effect on the direction of Alaska Air i.e., Alaska Air and Getty Realty go up and down completely randomly.
Pair Corralation between Alaska Air and Getty Realty
Considering the 90-day investment horizon Alaska Air Group is expected to generate 1.8 times more return on investment than Getty Realty. However, Alaska Air is 1.8 times more volatile than Getty Realty. It trades about 0.16 of its potential returns per unit of risk. Getty Realty is currently generating about 0.19 per unit of risk. If you would invest 4,923 in Alaska Air Group on September 2, 2024 and sell it today you would earn a total of 337.00 from holding Alaska Air Group or generate 6.85% 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. Getty Realty
Performance |
| Timeline |
| Alaska Air Group |
| Getty Realty |
Alaska Air and Getty Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Getty Realty
The main advantage of trading using opposite Alaska Air and Getty Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Getty Realty 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 Getty Realty will offset losses from the drop in Getty Realty's long position.| Alaska Air vs. Canadian Pacific Railway | Alaska Air vs. Werner Enterprises | Alaska Air vs. Canadian National Railway | Alaska Air vs. CSX Corporation |
| Getty Realty vs. Federal Realty Investment | Getty Realty vs. National Retail Properties | Getty Realty vs. Kimco Realty |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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