Correlation Between Alaska Air and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both Alaska Air and Sphere Entertainment 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 Sphere Entertainment 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 Sphere Entertainment Co, you can compare the effects of market volatilities on Alaska Air and Sphere Entertainment 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 Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Sphere Entertainment.
Diversification Opportunities for Alaska Air and Sphere Entertainment
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alaska and Sphere is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment 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 Sphere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere Entertainment has no effect on the direction of Alaska Air i.e., Alaska Air and Sphere Entertainment go up and down completely randomly.
Pair Corralation between Alaska Air and Sphere Entertainment
Considering the 90-day investment horizon Alaska Air Group is expected to generate 0.72 times more return on investment than Sphere Entertainment. However, Alaska Air Group is 1.39 times less risky than Sphere Entertainment. It trades about 0.09 of its potential returns per unit of risk. Sphere Entertainment Co is currently generating about 0.05 per unit of risk. If you would invest 3,575 in Alaska Air Group on September 4, 2024 and sell it today you would earn a total of 1,680 from holding Alaska Air Group or generate 46.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Air Group vs. Sphere Entertainment Co
Performance |
| Timeline |
| Alaska Air Group |
| Sphere Entertainment |
Alaska Air and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and Sphere Entertainment
The main advantage of trading using opposite Alaska Air and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Sphere Entertainment 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 Sphere Entertainment will offset losses from the drop in Sphere Entertainment's long position.| Alaska Air vs. Delta Air Lines | Alaska Air vs. United Airlines Holdings | Alaska Air vs. Frontier Group Holdings |
| Sphere Entertainment vs. Dine Brands Global | Sphere Entertainment vs. NextNav Warrant | Sphere Entertainment vs. Rave Restaurant Group | Sphere Entertainment vs. Datadog |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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