Correlation Between Fair Isaac and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Fair Isaac 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 Fair Isaac and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fair Isaac and Alaska Air Group,, you can compare the effects of market volatilities on Fair Isaac 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 Fair Isaac with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fair Isaac and Alaska Air.
Diversification Opportunities for Fair Isaac and Alaska Air
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fair and Alaska is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Fair Isaac 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 Fair Isaac 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 Fair Isaac 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 Fair Isaac i.e., Fair Isaac and Alaska Air go up and down completely randomly.
Pair Corralation between Fair Isaac and Alaska Air
Assuming the 90 days trading horizon Fair Isaac is expected to under-perform the Alaska Air. But the stock apears to be less risky and, when comparing its historical volatility, Fair Isaac is 1.11 times less risky than Alaska Air. The stock trades about -0.45 of its potential returns per unit of risk. The Alaska Air Group, is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 41,448 in Alaska Air Group, on October 25, 2024 and sell it today you would lose (1,789) from holding Alaska Air Group, or give up 4.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fair Isaac vs. Alaska Air Group,
Performance |
| Timeline |
| Fair Isaac |
| Alaska Air Group, |
Fair Isaac and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fair Isaac and Alaska Air
The main advantage of trading using opposite Fair Isaac and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fair Isaac 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.| Fair Isaac vs. Alaska Air Group, | Fair Isaac vs. Check Point Software | Fair Isaac vs. Micron Technology | Fair Isaac vs. Bemobi Mobile Tech |
| Alaska Air vs. Ares Management | Alaska Air vs. Public Storage | Alaska Air vs. Charter Communications | Alaska Air vs. MAHLE Metal Leve |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |