Correlation Between Alaska Air and Phenixfin
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Phenixfin 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 Phenixfin 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 Phenixfin, you can compare the effects of market volatilities on Alaska Air and Phenixfin 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 Phenixfin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Phenixfin.
Diversification Opportunities for Alaska Air and Phenixfin
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alaska and Phenixfin is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Phenixfin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phenixfin 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 Phenixfin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phenixfin has no effect on the direction of Alaska Air i.e., Alaska Air and Phenixfin go up and down completely randomly.
Pair Corralation between Alaska Air and Phenixfin
Considering the 90-day investment horizon Alaska Air Group is expected to generate 1.08 times more return on investment than Phenixfin. However, Alaska Air is 1.08 times more volatile than Phenixfin. It trades about -0.06 of its potential returns per unit of risk. Phenixfin is currently generating about -0.07 per unit of risk. If you would invest 6,747 in Alaska Air Group on October 23, 2024 and sell it today you would lose (113.00) from holding Alaska Air Group or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Phenixfin
Performance |
| Timeline |
| Alaska Air Group |
| Phenixfin |
Alaska Air and Phenixfin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Phenixfin
The main advantage of trading using opposite Alaska Air and Phenixfin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Phenixfin 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 Phenixfin will offset losses from the drop in Phenixfin'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 |
| Phenixfin vs. MFS Investment Grade | Phenixfin vs. Eaton Vance National | Phenixfin vs. Federated Premier Municipal | Phenixfin vs. Blackrock Muniholdings Ny |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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