Correlation Between Seagate Technology and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Seagate Technology 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 Seagate Technology and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seagate Technology Holdings and Alaska Air Group,, you can compare the effects of market volatilities on Seagate Technology 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 Seagate Technology with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seagate Technology and Alaska Air.
Diversification Opportunities for Seagate Technology and Alaska Air
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seagate and Alaska is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Seagate Technology Holdings 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 Seagate Technology 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 Seagate Technology Holdings 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 Seagate Technology i.e., Seagate Technology and Alaska Air go up and down completely randomly.
Pair Corralation between Seagate Technology and Alaska Air
Assuming the 90 days trading horizon Seagate Technology is expected to generate 5.33 times less return on investment than Alaska Air. But when comparing it to its historical volatility, Seagate Technology Holdings is 1.56 times less risky than Alaska Air. It trades about 0.05 of its potential returns per unit of risk. Alaska Air Group, is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 22,198 in Alaska Air Group, on October 26, 2024 and sell it today you would earn a total of 19,682 from holding Alaska Air Group, or generate 88.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seagate Technology Holdings vs. Alaska Air Group,
Performance |
| Timeline |
| Seagate Technology |
| Alaska Air Group, |
Seagate Technology and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seagate Technology and Alaska Air
The main advantage of trading using opposite Seagate Technology and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seagate Technology 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.| Seagate Technology vs. United States Steel | Seagate Technology vs. Spotify Technology SA | Seagate Technology vs. Warner Music Group | Seagate Technology vs. British American Tobacco |
| Alaska Air vs. Align Technology | Alaska Air vs. Seagate Technology Holdings | Alaska Air vs. Electronic Arts | Alaska Air vs. STMicroelectronics NV |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |