Correlation Between NESTE OYJ and Alaska Air
Can any of the company-specific risk be diversified away by investing in both NESTE OYJ 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 NESTE OYJ and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NESTE OYJ UNSPADR and Alaska Air Group, you can compare the effects of market volatilities on NESTE OYJ 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 NESTE OYJ with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of NESTE OYJ and Alaska Air.
Diversification Opportunities for NESTE OYJ and Alaska Air
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NESTE and Alaska is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding NESTE OYJ UNSPADR 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 NESTE OYJ 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 NESTE OYJ UNSPADR 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 NESTE OYJ i.e., NESTE OYJ and Alaska Air go up and down completely randomly.
Pair Corralation between NESTE OYJ and Alaska Air
Assuming the 90 days trading horizon NESTE OYJ UNSPADR is expected to under-perform the Alaska Air. In addition to that, NESTE OYJ is 1.49 times more volatile than Alaska Air Group. It trades about -0.19 of its total potential returns per unit of risk. Alaska Air Group is currently generating about 0.23 per unit of volatility. If you would invest 4,969 in Alaska Air Group on November 27, 2024 and sell it today you would earn a total of 1,969 from holding Alaska Air Group or generate 39.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NESTE OYJ UNSPADR vs. Alaska Air Group
Performance |
| Timeline |
| NESTE OYJ UNSPADR |
| Alaska Air Group |
NESTE OYJ and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NESTE OYJ and Alaska Air
The main advantage of trading using opposite NESTE OYJ and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NESTE OYJ 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.| NESTE OYJ vs. Cleanaway Waste Management | NESTE OYJ vs. Siemens Healthineers AG | NESTE OYJ vs. WESANA HEALTH HOLD | NESTE OYJ vs. COMM HEALTH SYSTEMS |
| Alaska Air vs. Platinum Investment Management | Alaska Air vs. METHODE ELECTRONICS | Alaska Air vs. Waste Management | Alaska Air vs. Samsung Electronics Co |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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