Correlation Between Sanyo Chemical and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Sanyo 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 Sanyo 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 Sanyo Chemical Industries and Alaska Air Group, you can compare the effects of market volatilities on Sanyo 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 Sanyo Chemical with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and Alaska Air.
Diversification Opportunities for Sanyo Chemical and Alaska Air
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sanyo and Alaska is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries 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 Sanyo 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 Sanyo Chemical Industries 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 Sanyo Chemical i.e., Sanyo Chemical and Alaska Air go up and down completely randomly.
Pair Corralation between Sanyo Chemical and Alaska Air
Assuming the 90 days horizon Sanyo Chemical Industries is expected to under-perform the Alaska Air. But the stock apears to be less risky and, when comparing its historical volatility, Sanyo Chemical Industries is 1.57 times less risky than Alaska Air. The stock trades about -0.16 of its potential returns per unit of risk. The Alaska Air Group is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 6,290 in Alaska Air Group on October 31, 2024 and sell it today you would earn a total of 506.00 from holding Alaska Air Group or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. Alaska Air Group
Performance |
| Timeline |
| Sanyo Chemical Industries |
| Alaska Air Group |
Sanyo Chemical and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and Alaska Air
The main advantage of trading using opposite Sanyo Chemical and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo 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.| Sanyo Chemical vs. Linde plc | Sanyo Chemical vs. Linde PLC | Sanyo Chemical vs. Air Liquide SA | Sanyo Chemical vs. The Sherwin Williams |
| Alaska Air vs. Telecom Argentina SA | Alaska Air vs. United Natural Foods | Alaska Air vs. Chengdu PUTIAN Telecommunications | Alaska Air vs. Zoom Video Communications |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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