Correlation Between Alaska Air and SAIHEAT
Can any of the company-specific risk be diversified away by investing in both Alaska Air and SAIHEAT 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 SAIHEAT 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 SAIHEAT Limited, you can compare the effects of market volatilities on Alaska Air and SAIHEAT 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 SAIHEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and SAIHEAT.
Diversification Opportunities for Alaska Air and SAIHEAT
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alaska and SAIHEAT is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited 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 SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of Alaska Air i.e., Alaska Air and SAIHEAT go up and down completely randomly.
Pair Corralation between Alaska Air and SAIHEAT
Considering the 90-day investment horizon Alaska Air is expected to generate 15.76 times less return on investment than SAIHEAT. But when comparing it to its historical volatility, Alaska Air Group is 14.62 times less risky than SAIHEAT. It trades about 0.1 of its potential returns per unit of risk. SAIHEAT Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 13.00 in SAIHEAT Limited on August 29, 2024 and sell it today you would lose (1.91) from holding SAIHEAT Limited or give up 14.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 38.76% |
| Values | Daily Returns |
Alaska Air Group vs. SAIHEAT Limited
Performance |
| Timeline |
| Alaska Air Group |
| SAIHEAT Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Alaska Air and SAIHEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and SAIHEAT
The main advantage of trading using opposite Alaska Air and SAIHEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, SAIHEAT 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 SAIHEAT will offset losses from the drop in SAIHEAT'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 |
| SAIHEAT vs. Raymond James Financial | SAIHEAT vs. Virtu Financial | SAIHEAT vs. Lion Financial Group | SAIHEAT vs. The Charles Schwab |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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