Correlation Between Alaska Air and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Alaska Air and NETGEAR 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 NETGEAR 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 NETGEAR, you can compare the effects of market volatilities on Alaska Air and NETGEAR 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 NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and NETGEAR.
Diversification Opportunities for Alaska Air and NETGEAR
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alaska and NETGEAR is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR 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 NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Alaska Air i.e., Alaska Air and NETGEAR go up and down completely randomly.
Pair Corralation between Alaska Air and NETGEAR
Considering the 90-day investment horizon Alaska Air is expected to generate 4.48 times less return on investment than NETGEAR. But when comparing it to its historical volatility, Alaska Air Group is 1.47 times less risky than NETGEAR. It trades about 0.02 of its potential returns per unit of risk. NETGEAR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,400 in NETGEAR on August 31, 2024 and sell it today you would earn a total of 1,060 from holding NETGEAR or generate 75.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. NETGEAR
Performance |
| Timeline |
| Alaska Air Group |
| NETGEAR |
Alaska Air and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and NETGEAR
The main advantage of trading using opposite Alaska Air and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR's long position.| Alaska Air vs. JetBlue Airways Corp | Alaska Air vs. Allegiant Travel | Alaska Air vs. SkyWest | Alaska Air vs. Air Transport Services |
| NETGEAR vs. KVH Industries | NETGEAR vs. Ituran Location and | NETGEAR vs. Aviat Networks | NETGEAR vs. Mynaric AG ADR |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |