Correlation Between Alaska Air and Lipocine
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Lipocine 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 Lipocine 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 Lipocine, you can compare the effects of market volatilities on Alaska Air and Lipocine 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 Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Lipocine.
Diversification Opportunities for Alaska Air and Lipocine
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alaska and Lipocine is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine 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 Lipocine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipocine has no effect on the direction of Alaska Air i.e., Alaska Air and Lipocine go up and down completely randomly.
Pair Corralation between Alaska Air and Lipocine
Considering the 90-day investment horizon Alaska Air Group is expected to generate 0.43 times more return on investment than Lipocine. However, Alaska Air Group is 2.33 times less risky than Lipocine. It trades about 0.05 of its potential returns per unit of risk. Lipocine is currently generating about 0.01 per unit of risk. If you would invest 3,927 in Alaska Air Group on December 7, 2024 and sell it today you would earn a total of 1,975 from holding Alaska Air Group or generate 50.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Lipocine
Performance |
| Timeline |
| Alaska Air Group |
| Lipocine |
Alaska Air and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Lipocine
The main advantage of trading using opposite Alaska Air and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Lipocine 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 Lipocine will offset losses from the drop in Lipocine's 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 |
| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint Therapeutics |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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