Correlation Between NISSAN CHEMICAL and Alaska Air
Can any of the company-specific risk be diversified away by investing in both NISSAN CHEMICAL 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 NISSAN CHEMICAL and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NISSAN CHEMICAL IND and Alaska Air Group, you can compare the effects of market volatilities on NISSAN CHEMICAL 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 NISSAN CHEMICAL with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSAN CHEMICAL and Alaska Air.
Diversification Opportunities for NISSAN CHEMICAL and Alaska Air
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NISSAN and Alaska is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding NISSAN CHEMICAL IND 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 NISSAN CHEMICAL 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 NISSAN CHEMICAL IND 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 NISSAN CHEMICAL i.e., NISSAN CHEMICAL and Alaska Air go up and down completely randomly.
Pair Corralation between NISSAN CHEMICAL and Alaska Air
Assuming the 90 days trading horizon NISSAN CHEMICAL IND is expected to under-perform the Alaska Air. But the stock apears to be less risky and, when comparing its historical volatility, NISSAN CHEMICAL IND is 1.37 times less risky than Alaska Air. The stock trades about -0.04 of its potential returns per unit of risk. The Alaska Air Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,865 in Alaska Air Group on November 28, 2024 and sell it today you would earn a total of 2,923 from holding Alaska Air Group or generate 75.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NISSAN CHEMICAL IND vs. Alaska Air Group
Performance |
| Timeline |
| NISSAN CHEMICAL IND |
| Alaska Air Group |
NISSAN CHEMICAL and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISSAN CHEMICAL and Alaska Air
The main advantage of trading using opposite NISSAN CHEMICAL and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSAN CHEMICAL 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.| NISSAN CHEMICAL vs. Cleanaway Waste Management | NISSAN CHEMICAL vs. Harmony Gold Mining | NISSAN CHEMICAL vs. De Grey Mining | NISSAN CHEMICAL vs. CanSino Biologics |
| Alaska Air vs. Cairo Communication SpA | Alaska Air vs. Laureate Education | Alaska Air vs. TELECOM ITALRISP ADR10 | Alaska Air vs. Spirent Communications plc |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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