Correlation Between Alaska Air and Grace Therapeutics,

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

Diversification Opportunities for Alaska Air and Grace Therapeutics,

0.64

Correlation Coefficient

Alaska Air  Grace Therapeutics,

Poor diversification

The 3 months correlation between Alaska and Grace is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Grace Therapeutics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grace Therapeutics, 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 Grace Therapeutics,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grace Therapeutics, has no effect on the direction of Alaska Air i.e., Alaska Air and Grace Therapeutics, go up and down completely randomly.

Pair Corralation between Alaska Air and Grace Therapeutics,

Considering the 90-day investment horizon Alaska Air is expected to generate 1.1 times less return on investment than Grace Therapeutics,. But when comparing it to its historical volatility, Alaska Air Group is 2.08 times less risky than Grace Therapeutics,. It trades about 0.03 of its potential returns per unit of risk. Grace Therapeutics, is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  396.00  in Grace Therapeutics, on October 23, 2024 and sell it today you would lose (30.00) from holding Grace Therapeutics, or give up 7.58% of portfolio value over 90 days.

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

Alaska Air Group  vs.  Grace Therapeutics,

Alaska Air Group

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alaska Air Group are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Alaska Air disclosed solid returns over the last few months and may actually be approaching a breakup point.

Grace Therapeutics,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grace Therapeutics, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Grace Therapeutics, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Alaska Air and Grace Therapeutics,

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

The idea behind Alaska Air Group and Grace Therapeutics, 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.