Correlation Between Alaska Air and Playtika Holding
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Playtika Holding 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 Playtika Holding 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 Playtika Holding Corp, you can compare the effects of market volatilities on Alaska Air and Playtika Holding 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 Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Playtika Holding.
Diversification Opportunities for Alaska Air and Playtika Holding
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alaska and Playtika is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding Corp 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 Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of Alaska Air i.e., Alaska Air and Playtika Holding go up and down completely randomly.
Pair Corralation between Alaska Air and Playtika Holding
Considering the 90-day investment horizon Alaska Air Group is expected to generate 0.87 times more return on investment than Playtika Holding. However, Alaska Air Group is 1.15 times less risky than Playtika Holding. It trades about 0.1 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about 0.05 per unit of risk. If you would invest 3,626 in Alaska Air Group on August 29, 2024 and sell it today you would earn a total of 1,667 from holding Alaska Air Group or generate 45.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Playtika Holding Corp
Performance |
| Timeline |
| Alaska Air Group |
| Playtika Holding Corp |
Alaska Air and Playtika Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Playtika Holding
The main advantage of trading using opposite Alaska Air and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Playtika Holding 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 Playtika Holding will offset losses from the drop in Playtika Holding'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 |
| Playtika Holding vs. Doubledown Interactive Co | Playtika Holding vs. SohuCom | Playtika Holding vs. Playstudios | Playtika Holding vs. GDEV Inc |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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