Correlation Between Alaska Air and Q2M Managementberatu

Can any of the company-specific risk be diversified away by investing in both Alaska Air and Q2M Managementberatu 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 Q2M Managementberatu 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 Q2M Managementberatung AG, you can compare the effects of market volatilities on Alaska Air and Q2M Managementberatu 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 Q2M Managementberatu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Q2M Managementberatu.

Diversification Opportunities for Alaska Air and Q2M Managementberatu

-0.63

Correlation Coefficient

Alaska Air  Q2M Managementberatu

Excellent diversification

The 3 months correlation between Alaska and Q2M is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Q2M Managementberatung AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q2M Managementberatung 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 Q2M Managementberatu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q2M Managementberatung has no effect on the direction of Alaska Air i.e., Alaska Air and Q2M Managementberatu go up and down completely randomly.

Pair Corralation between Alaska Air and Q2M Managementberatu

Assuming the 90 days trading horizon Alaska Air Group is expected to generate 3.1 times more return on investment than Q2M Managementberatu. However, Alaska Air is 3.1 times more volatile than Q2M Managementberatung AG. It trades about 0.28 of its potential returns per unit of risk. Q2M Managementberatung AG is currently generating about -0.5 per unit of risk. If you would invest  5,290  in Alaska Air Group on October 6, 2024 and sell it today you would earn a total of  988.00  from holding Alaska Air Group or generate 18.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Alaska Air Group  vs.  Q2M Managementberatung AG

Alaska Air Group

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alaska Air Group are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Alaska Air unveiled solid returns over the last few months and may actually be approaching a breakup point.

Q2M Managementberatung

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Q2M Managementberatung AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Alaska Air and Q2M Managementberatu

The main advantage of trading using opposite Alaska Air and Q2M Managementberatu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Q2M Managementberatu 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 Q2M Managementberatu will offset losses from the drop in Q2M Managementberatu's long position.

The idea behind Alaska Air Group and Q2M Managementberatung AG 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.