Correlation Between Alaska Power and 1847 Holdings

Can any of the company-specific risk be diversified away by investing in both Alaska Power and 1847 Holdings 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 Power and 1847 Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alaska Power Telephone and 1847 Holdings LLC, you can compare the effects of market volatilities on Alaska Power and 1847 Holdings 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 Power with a short position of 1847 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Power and 1847 Holdings.

Diversification Opportunities for Alaska Power and 1847 Holdings

-0.24

Correlation Coefficient

Alaska Power  1847 Holdings

Very good diversification

The 3 months correlation between Alaska and 1847 is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Power Telephone and 1847 Holdings LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1847 Holdings LLC and Alaska Power 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 Power Telephone are associated (or correlated) with 1847 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1847 Holdings LLC has no effect on the direction of Alaska Power i.e., Alaska Power and 1847 Holdings go up and down completely randomly.

Pair Corralation between Alaska Power and 1847 Holdings

Given the investment horizon of 90 days Alaska Power Telephone is expected to under-perform the 1847 Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Alaska Power Telephone is 25.34 times less risky than 1847 Holdings. The pink sheet trades about -0.05 of its potential returns per unit of risk. The 1847 Holdings LLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  160,688  in 1847 Holdings LLC on September 5, 2024 and sell it today you would lose (160,647) from holding 1847 Holdings LLC or give up 99.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	66.87%
Values	Daily Returns

Alaska Power Telephone  vs.  1847 Holdings LLC

Alaska Power Telephone

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alaska Power Telephone are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Alaska Power is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

1847 Holdings LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1847 Holdings LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Alaska Power and 1847 Holdings

The main advantage of trading using opposite Alaska Power and 1847 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Power position performs unexpectedly, 1847 Holdings 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 1847 Holdings will offset losses from the drop in 1847 Holdings' long position.

The idea behind Alaska Power Telephone and 1847 Holdings LLC 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.