Correlation Between Beyond Meat and Allegiant Travel
Can any of the company-specific risk be diversified away by investing in both Beyond Meat and Allegiant Travel 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 Beyond Meat and Allegiant Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and Allegiant Travel, you can compare the effects of market volatilities on Beyond Meat and Allegiant Travel 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 Beyond Meat with a short position of Allegiant Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and Allegiant Travel.
Diversification Opportunities for Beyond Meat and Allegiant Travel
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beyond and Allegiant is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat and Allegiant Travel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegiant Travel and Beyond Meat 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 Beyond Meat are associated (or correlated) with Allegiant Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegiant Travel has no effect on the direction of Beyond Meat i.e., Beyond Meat and Allegiant Travel go up and down completely randomly.
Pair Corralation between Beyond Meat and Allegiant Travel
Given the investment horizon of 90 days Beyond Meat is expected to under-perform the Allegiant Travel. In addition to that, Beyond Meat is 1.51 times more volatile than Allegiant Travel. It trades about -0.02 of its total potential returns per unit of risk. Allegiant Travel is currently generating about 0.03 per unit of volatility. If you would invest 6,918 in Allegiant Travel on September 4, 2024 and sell it today you would earn a total of 1,159 from holding Allegiant Travel or generate 16.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Meat vs. Allegiant Travel
Performance |
| Timeline |
| Beyond Meat |
| Allegiant Travel |
Beyond Meat and Allegiant Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Meat and Allegiant Travel
The main advantage of trading using opposite Beyond Meat and Allegiant Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat position performs unexpectedly, Allegiant Travel 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 Allegiant Travel will offset losses from the drop in Allegiant Travel's long position.| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
| Allegiant Travel vs. Delta Air Lines | Allegiant Travel vs. United Airlines Holdings | Allegiant Travel vs. Frontier Group Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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