Correlation Between Alaska Air and Corporacion America

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

Diversification Opportunities for Alaska Air and Corporacion America

0.53

Correlation Coefficient

Alaska Air  Corporacion America

Very weak diversification

The 3 months correlation between Alaska and Corporacion is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Corporacion America Airports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacion America 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 Corporacion America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacion America has no effect on the direction of Alaska Air i.e., Alaska Air and Corporacion America go up and down completely randomly.

Pair Corralation between Alaska Air and Corporacion America

Considering the 90-day investment horizon Alaska Air Group is expected to under-perform the Corporacion America. In addition to that, Alaska Air is 1.07 times more volatile than Corporacion America Airports. It trades about -0.14 of its total potential returns per unit of risk. Corporacion America Airports is currently generating about -0.01 per unit of volatility. If you would invest  1,878  in Corporacion America Airports on December 30, 2024 and sell it today you would lose (56.00) from holding Corporacion America Airports or give up 2.98% of portfolio value over 90 days.

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

Alaska Air Group  vs.  Corporacion America Airports

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. Despite uncertain performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Corporacion America

Risk-Adjusted Performance

Weak

Over the last 90 days Corporacion America Airports has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Corporacion America is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Alaska Air and Corporacion America

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

The idea behind Alaska Air Group and Corporacion America Airports 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 Stocks Directory module to find actively traded stocks across global markets.