Correlation Between Wizz Air and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Wizz 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 Wizz 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 Wizz Air Holdings and Alaska Air Group, you can compare the effects of market volatilities on Wizz 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 Wizz Air with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Alaska Air.
Diversification Opportunities for Wizz Air and Alaska Air
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wizz and Alaska is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air 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 Wizz 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 Wizz Air 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 Wizz Air i.e., Wizz Air and Alaska Air go up and down completely randomly.
Pair Corralation between Wizz Air and Alaska Air
Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the Alaska Air. In addition to that, Wizz Air is 1.42 times more volatile than Alaska Air Group. It trades about -0.03 of its total potential returns per unit of risk. Alaska Air Group is currently generating about 0.03 per unit of volatility. If you would invest 5,341 in Alaska Air Group on October 28, 2024 and sell it today you would earn a total of 1,530 from holding Alaska Air Group or generate 28.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Wizz Air Holdings vs. Alaska Air Group
Performance |
| Timeline |
| Wizz Air Holdings |
| Alaska Air Group |
Wizz Air and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and Alaska Air
The main advantage of trading using opposite Wizz Air and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz 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.| Wizz Air vs. Samsung Electronics Co | Wizz Air vs. Samsung Electronics Co | Wizz Air vs. Toyota Motor Corp | Wizz Air vs. Hon Hai Precision |
| Alaska Air vs. Cellnex Telecom SA | Alaska Air vs. Charter Communications Cl | Alaska Air vs. Batm Advanced Communications | Alaska Air vs. Compal Electronics GDR |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |