Correlation Between Norwegian Air and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Norwegian Air 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 Norwegian Air and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norwegian Air Shuttle and Alaska Air Group, you can compare the effects of market volatilities on Norwegian Air 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 Norwegian Air with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and Alaska Air.
Diversification Opportunities for Norwegian Air and Alaska Air
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Norwegian and Alaska is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle 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 Norwegian Air 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 Norwegian Air Shuttle 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 Norwegian Air i.e., Norwegian Air and Alaska Air go up and down completely randomly.
Pair Corralation between Norwegian Air and Alaska Air
Assuming the 90 days horizon Norwegian Air Shuttle is expected to under-perform the Alaska Air. In addition to that, Norwegian Air is 1.76 times more volatile than Alaska Air Group. It trades about -0.07 of its total potential returns per unit of risk. Alaska Air Group is currently generating about 0.13 per unit of volatility. If you would invest 6,360 in Alaska Air Group on October 28, 2024 and sell it today you would earn a total of 244.00 from holding Alaska Air Group or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. Alaska Air Group
Performance |
| Timeline |
| Norwegian Air Shuttle |
| Alaska Air Group |
Norwegian Air and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and Alaska Air
The main advantage of trading using opposite Norwegian Air and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air 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.| Norwegian Air vs. CHRYSALIS INVESTMENTS LTD | Norwegian Air vs. United Rentals | Norwegian Air vs. Carsales | Norwegian Air vs. Virtus Investment Partners |
| Alaska Air vs. Kaiser Aluminum | Alaska Air vs. ADRIATIC METALS LS 013355 | Alaska Air vs. DISTRICT METALS | Alaska Air vs. AMAG Austria Metall |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |