Correlation Between WGHT WTCHER and Alaska Air
Can any of the company-specific risk be diversified away by investing in both WGHT WTCHER 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 WGHT WTCHER and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WGHT WTCHER INTL and Alaska Air Group, you can compare the effects of market volatilities on WGHT WTCHER 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 WGHT WTCHER with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of WGHT WTCHER and Alaska Air.
Diversification Opportunities for WGHT WTCHER and Alaska Air
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WGHT and Alaska is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding WGHT WTCHER INTL 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 WGHT WTCHER 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 WGHT WTCHER INTL 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 WGHT WTCHER i.e., WGHT WTCHER and Alaska Air go up and down completely randomly.
Pair Corralation between WGHT WTCHER and Alaska Air
Assuming the 90 days trading horizon WGHT WTCHER INTL is expected to generate 3.59 times more return on investment than Alaska Air. However, WGHT WTCHER is 3.59 times more volatile than Alaska Air Group. It trades about 0.16 of its potential returns per unit of risk. Alaska Air Group is currently generating about 0.2 per unit of risk. If you would invest 95.00 in WGHT WTCHER INTL on September 2, 2024 and sell it today you would earn a total of 23.00 from holding WGHT WTCHER INTL or generate 24.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WGHT WTCHER INTL vs. Alaska Air Group
Performance |
| Timeline |
| WGHT WTCHER INTL |
| Alaska Air Group |
WGHT WTCHER and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WGHT WTCHER and Alaska Air
The main advantage of trading using opposite WGHT WTCHER and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WGHT WTCHER 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.| WGHT WTCHER vs. PENN NATL GAMING | WGHT WTCHER vs. TSOGO SUN GAMING | WGHT WTCHER vs. GAMESTOP | WGHT WTCHER vs. NORTHEAST UTILITIES |
| Alaska Air vs. MHP Hotel AG | Alaska Air vs. COVIVIO HOTELS INH | Alaska Air vs. Solstad Offshore ASA | Alaska Air vs. Burlington Stores |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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