Correlation Between Alaska Air and MYR
Can any of the company-specific risk be diversified away by investing in both Alaska Air and MYR 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 MYR 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 MYR Group, you can compare the effects of market volatilities on Alaska Air and MYR 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 MYR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and MYR.
Diversification Opportunities for Alaska Air and MYR
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alaska and MYR is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR Group 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 MYR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYR Group has no effect on the direction of Alaska Air i.e., Alaska Air and MYR go up and down completely randomly.
Pair Corralation between Alaska Air and MYR
Considering the 90-day investment horizon Alaska Air Group is expected to generate 0.8 times more return on investment than MYR. However, Alaska Air Group is 1.24 times less risky than MYR. It trades about -0.12 of its potential returns per unit of risk. MYR Group is currently generating about -0.1 per unit of risk. If you would invest 6,702 in Alaska Air Group on December 26, 2024 and sell it today you would lose (1,321) from holding Alaska Air Group or give up 19.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Alaska Air Group vs. MYR Group
Performance |
Timeline |
Alaska Air Group |
MYR Group |
Alaska Air and MYR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alaska Air and MYR
The main advantage of trading using opposite Alaska Air and MYR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, MYR 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 MYR will offset losses from the drop in MYR's long position.Alaska Air vs. Delta Air Lines | Alaska Air vs. United Airlines Holdings | Alaska Air vs. American Airlines Group | Alaska Air vs. JetBlue Airways Corp |
MYR vs. Comfort Systems USA | MYR vs. Granite Construction Incorporated | MYR vs. Dycom Industries | MYR vs. MasTec Inc |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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