Correlation Between International Consolidated and Alaska Air
Can any of the company-specific risk be diversified away by investing in both International Consolidated 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 International Consolidated and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and Alaska Air Group, you can compare the effects of market volatilities on International Consolidated 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 International Consolidated with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Alaska Air.
Diversification Opportunities for International Consolidated and Alaska Air
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between International and Alaska is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air 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 International Consolidated 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 International Consolidated Airlines 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 International Consolidated i.e., International Consolidated and Alaska Air go up and down completely randomly.
Pair Corralation between International Consolidated and Alaska Air
Assuming the 90 days horizon International Consolidated Airlines is expected to generate 0.88 times more return on investment than Alaska Air. However, International Consolidated Airlines is 1.14 times less risky than Alaska Air. It trades about 0.2 of its potential returns per unit of risk. Alaska Air Group is currently generating about 0.14 per unit of risk. If you would invest 350.00 in International Consolidated Airlines on November 9, 2024 and sell it today you would earn a total of 552.00 from holding International Consolidated Airlines or generate 157.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Consolidated Air vs. Alaska Air Group
Performance |
| Timeline |
| International Consolidated |
| Alaska Air Group |
International Consolidated and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and Alaska Air
The main advantage of trading using opposite International Consolidated and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated 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.| International Consolidated vs. Air France KLM SA | International Consolidated vs. Air France KLM | International Consolidated vs. Finnair Oyj | International Consolidated vs. AirAsia Group Berhad |
| Alaska Air vs. Delta Air Lines | Alaska Air vs. United Airlines Holdings | Alaska Air vs. American Airlines Group | Alaska Air vs. JetBlue Airways Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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