Correlation Between Alaska Air and Hawaiian Holdings
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Hawaiian Holdings 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 Hawaiian Holdings 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 Hawaiian Holdings, you can compare the effects of market volatilities on Alaska Air and Hawaiian Holdings 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 Hawaiian Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Hawaiian Holdings.
Diversification Opportunities for Alaska Air and Hawaiian Holdings
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alaska and Hawaiian is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Hawaiian Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Holdings 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 Hawaiian Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Holdings has no effect on the direction of Alaska Air i.e., Alaska Air and Hawaiian Holdings go up and down completely randomly.
Pair Corralation between Alaska Air and Hawaiian Holdings
If you would invest 6,430 in Alaska Air Group on November 2, 2024 and sell it today you would earn a total of 969.00 from holding Alaska Air Group or generate 15.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Alaska Air Group vs. Hawaiian Holdings
Performance |
| Timeline |
| Alaska Air Group |
| Hawaiian Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alaska Air and Hawaiian Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Hawaiian Holdings
The main advantage of trading using opposite Alaska Air and Hawaiian Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Hawaiian Holdings 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 Hawaiian Holdings will offset losses from the drop in Hawaiian Holdings' 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 |
| Hawaiian Holdings vs. Southwest Airlines | Hawaiian Holdings vs. JetBlue Airways Corp | Hawaiian Holdings vs. United Airlines Holdings | Hawaiian Holdings vs. Delta Air Lines |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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