Correlation Between Alaska Air and METALL ZUG
Can any of the company-specific risk be diversified away by investing in both Alaska Air and METALL ZUG 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 Alaska Air and METALL ZUG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alaska Air Group and METALL ZUG AG, you can compare the effects of market volatilities on Alaska Air and METALL ZUG 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 Alaska Air with a short position of METALL ZUG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and METALL ZUG.
Diversification Opportunities for Alaska Air and METALL ZUG
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alaska and METALL is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and METALL ZUG AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METALL ZUG AG and Alaska 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 Alaska Air Group are associated (or correlated) with METALL ZUG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METALL ZUG AG has no effect on the direction of Alaska Air i.e., Alaska Air and METALL ZUG go up and down completely randomly.
Pair Corralation between Alaska Air and METALL ZUG
Assuming the 90 days trading horizon Alaska Air Group is expected to generate 1.99 times more return on investment than METALL ZUG. However, Alaska Air is 1.99 times more volatile than METALL ZUG AG. It trades about 0.27 of its potential returns per unit of risk. METALL ZUG AG is currently generating about -0.2 per unit of risk. If you would invest 4,553 in Alaska Air Group on October 21, 2024 and sell it today you would earn a total of 2,096 from holding Alaska Air Group or generate 46.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 93.75% |
Values | Daily Returns |
Alaska Air Group vs. METALL ZUG AG
Performance |
Timeline |
Alaska Air Group |
METALL ZUG AG |
Alaska Air and METALL ZUG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alaska Air and METALL ZUG
The main advantage of trading using opposite Alaska Air and METALL ZUG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, METALL ZUG 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 METALL ZUG will offset losses from the drop in METALL ZUG's long position.Alaska Air vs. MyHealthChecked Plc | Alaska Air vs. Primary Health Properties | Alaska Air vs. Naturhouse Health SA | Alaska Air vs. Taiwan Semiconductor Manufacturing |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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