Correlation Between Alaska Air and JD Sports
Can any of the company-specific risk be diversified away by investing in both Alaska Air and JD Sports 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 JD Sports 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 JD Sports Fashion, you can compare the effects of market volatilities on Alaska Air and JD Sports 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 JD Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and JD Sports.
Diversification Opportunities for Alaska Air and JD Sports
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alaska and JDDSF is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and JD Sports Fashion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Sports Fashion 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 JD Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Sports Fashion has no effect on the direction of Alaska Air i.e., Alaska Air and JD Sports go up and down completely randomly.
Pair Corralation between Alaska Air and JD Sports
Considering the 90-day investment horizon Alaska Air Group is expected to generate 0.86 times more return on investment than JD Sports. However, Alaska Air Group is 1.16 times less risky than JD Sports. It trades about 0.1 of its potential returns per unit of risk. JD Sports Fashion is currently generating about 0.03 per unit of risk. If you would invest 4,176 in Alaska Air Group on September 2, 2024 and sell it today you would earn a total of 1,084 from holding Alaska Air Group or generate 25.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. JD Sports Fashion
Performance |
| Timeline |
| Alaska Air Group |
| JD Sports Fashion |
Alaska Air and JD Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and JD Sports
The main advantage of trading using opposite Alaska Air and JD Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, JD Sports 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 JD Sports will offset losses from the drop in JD Sports' long position.| Alaska Air vs. Canadian Pacific Railway | Alaska Air vs. Werner Enterprises | Alaska Air vs. Canadian National Railway | Alaska Air vs. CSX Corporation |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |