Correlation Between DAX Index and Alaska Air
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By analyzing existing cross correlation between DAX Index and Alaska Air Group, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Alaska Air.
Diversification Opportunities for DAX Index and Alaska Air
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Alaska is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index 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 DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Alaska Air go up and down completely randomly.
Pair Corralation between DAX Index and Alaska Air
Assuming the 90 days trading horizon DAX Index is expected to generate 0.35 times more return on investment than Alaska Air. However, DAX Index is 2.88 times less risky than Alaska Air. It trades about 0.08 of its potential returns per unit of risk. Alaska Air Group is currently generating about 0.01 per unit of risk. If you would invest 1,593,758 in DAX Index on August 28, 2024 and sell it today you would earn a total of 346,762 from holding DAX Index or generate 21.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
DAX Index vs. Alaska Air Group
Performance |
| Timeline |
DAX Index and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Alaska Air Group
Pair trading matchups for Alaska Air
Pair Trading with DAX Index and Alaska Air
The main advantage of trading using opposite DAX Index and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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