Correlation Between Alaska Air and SARTORIUS

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

Diversification Opportunities for Alaska Air and SARTORIUS

0.46

Correlation Coefficient

Alaska Air  SARTORIUS

Very weak diversification

The 3 months correlation between Alaska and SARTORIUS is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and SARTORIUS AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SARTORIUS AG UNSPADR 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 SARTORIUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SARTORIUS AG UNSPADR has no effect on the direction of Alaska Air i.e., Alaska Air and SARTORIUS go up and down completely randomly.

Pair Corralation between Alaska Air and SARTORIUS

Assuming the 90 days trading horizon Alaska Air Group is expected to under-perform the SARTORIUS. But the stock apears to be less risky and, when comparing its historical volatility, Alaska Air Group is 1.13 times less risky than SARTORIUS. The stock trades about -0.17 of its potential returns per unit of risk. The SARTORIUS AG UNSPADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,400  in SARTORIUS AG UNSPADR on December 23, 2024 and sell it today you would earn a total of  280.00  from holding SARTORIUS AG UNSPADR or generate 8.24% return on investment over 90 days.

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

Alaska Air Group  vs.  SARTORIUS AG UNSPADR

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.

SARTORIUS AG UNSPADR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SARTORIUS AG UNSPADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, SARTORIUS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Alaska Air and SARTORIUS

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

The idea behind Alaska Air Group and SARTORIUS AG UNSPADR 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.