Correlation Between BRIT AMER and Alaska Air
Can any of the company-specific risk be diversified away by investing in both BRIT AMER and Alaska Air 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 BRIT AMER and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRIT AMER TOBACCO and Alaska Air Group, you can compare the effects of market volatilities on BRIT AMER and Alaska Air 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 BRIT AMER with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRIT AMER and Alaska Air.
Diversification Opportunities for BRIT AMER and Alaska Air
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BRIT and Alaska is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding BRIT AMER TOBACCO and Alaska Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Air Group and BRIT AMER 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 BRIT AMER TOBACCO are associated (or correlated) with Alaska Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Air Group has no effect on the direction of BRIT AMER i.e., BRIT AMER and Alaska Air go up and down completely randomly.
Pair Corralation between BRIT AMER and Alaska Air
Assuming the 90 days trading horizon BRIT AMER is expected to generate 2.29 times less return on investment than Alaska Air. But when comparing it to its historical volatility, BRIT AMER TOBACCO is 1.6 times less risky than Alaska Air. It trades about 0.16 of its potential returns per unit of risk. Alaska Air Group is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,041 in Alaska Air Group on August 30, 2024 and sell it today you would earn a total of 928.00 from holding Alaska Air Group or generate 22.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRIT AMER TOBACCO vs. Alaska Air Group
Performance |
| Timeline |
| BRIT AMER TOBACCO |
| Alaska Air Group |
BRIT AMER and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRIT AMER and Alaska Air
The main advantage of trading using opposite BRIT AMER and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRIT AMER position performs unexpectedly, Alaska Air 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 Alaska Air will offset losses from the drop in Alaska Air's long position.| BRIT AMER vs. Apple Inc | BRIT AMER vs. Apple Inc | BRIT AMER vs. Superior Plus Corp | BRIT AMER vs. SIVERS SEMICONDUCTORS AB |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |