Correlation Between Alaska Air and Integral
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Integral 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 Integral 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 Integral Ad Science, you can compare the effects of market volatilities on Alaska Air and Integral 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 Integral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Integral.
Diversification Opportunities for Alaska Air and Integral
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Alaska and Integral is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Alaska Air i.e., Alaska Air and Integral go up and down completely randomly.
Pair Corralation between Alaska Air and Integral
Considering the 90-day investment horizon Alaska Air is expected to generate 2.11 times less return on investment than Integral. But when comparing it to its historical volatility, Alaska Air Group is 1.65 times less risky than Integral. It trades about 0.02 of its potential returns per unit of risk. Integral Ad Science is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 963.00 in Integral Ad Science on August 25, 2024 and sell it today you would earn a total of 145.00 from holding Integral Ad Science or generate 15.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Alaska Air Group vs. Integral Ad Science
Performance |
| Timeline |
| Alaska Air Group |
| Integral Ad Science |
Alaska Air and Integral Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Integral
The main advantage of trading using opposite Alaska Air and Integral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Integral 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 Integral will offset losses from the drop in Integral's long position.| Alaska Air vs. Spirit Airlines | Alaska Air vs. United Airlines Holdings | Alaska Air vs. Frontier Group 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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