Correlation Between Alaska Air and Amaroq Minerals

Can any of the company-specific risk be diversified away by investing in both Alaska Air and Amaroq Minerals 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 Amaroq Minerals 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 Amaroq Minerals, you can compare the effects of market volatilities on Alaska Air and Amaroq Minerals 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 Amaroq Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Amaroq Minerals.

Diversification Opportunities for Alaska Air and Amaroq Minerals

0.57

Correlation Coefficient

Alaska Air  Amaroq Minerals

Very weak diversification

The 3 months correlation between Alaska and Amaroq is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Amaroq Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amaroq Minerals 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 Amaroq Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amaroq Minerals has no effect on the direction of Alaska Air i.e., Alaska Air and Amaroq Minerals go up and down completely randomly.

Pair Corralation between Alaska Air and Amaroq Minerals

Assuming the 90 days trading horizon Alaska Air Group is expected to under-perform the Amaroq Minerals. In addition to that, Alaska Air is 1.19 times more volatile than Amaroq Minerals. It trades about -0.13 of its total potential returns per unit of risk. Amaroq Minerals is currently generating about -0.05 per unit of volatility. If you would invest  10,150  in Amaroq Minerals on December 23, 2024 and sell it today you would lose (850.00) from holding Amaroq Minerals or give up 8.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Alaska Air Group  vs.  Amaroq Minerals

Alaska Air Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alaska Air Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Amaroq Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amaroq Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Alaska Air and Amaroq Minerals

The main advantage of trading using opposite Alaska Air and Amaroq Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Amaroq Minerals 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 Amaroq Minerals will offset losses from the drop in Amaroq Minerals' long position.

The idea behind Alaska Air Group and Amaroq Minerals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.