Correlation Between Expand Energy and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Expand Energy and Alaska Air 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 Expand Energy and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Alaska Air Group, you can compare the effects of market volatilities on Expand Energy and Alaska Air 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 Expand Energy with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Alaska Air.
Diversification Opportunities for Expand Energy and Alaska Air
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Expand and Alaska is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and Alaska Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Air Group and Expand Energy 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 Expand Energy are associated (or correlated) with Alaska Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Air Group has no effect on the direction of Expand Energy i.e., Expand Energy and Alaska Air go up and down completely randomly.
Pair Corralation between Expand Energy and Alaska Air
Considering the 90-day investment horizon Expand Energy is expected to generate 0.62 times more return on investment than Alaska Air. However, Expand Energy is 1.62 times less risky than Alaska Air. It trades about 0.14 of its potential returns per unit of risk. Alaska Air Group is currently generating about -0.11 per unit of risk. If you would invest 9,605 in Expand Energy on December 27, 2024 and sell it today you would earn a total of 1,389 from holding Expand Energy or generate 14.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Expand Energy vs. Alaska Air Group
Performance |
Timeline |
Expand Energy |
Alaska Air Group |
Expand Energy and Alaska Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Expand Energy and Alaska Air
The main advantage of trading using opposite Expand Energy and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy position performs unexpectedly, Alaska Air 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 Alaska Air will offset losses from the drop in Alaska Air's long position.Expand Energy vs. Spyre Therapeutics | Expand Energy vs. Merit Medical Systems | Expand Energy vs. Northstar Clean Technologies | Expand Energy vs. Loews Corp |
Alaska Air vs. Delta Air Lines | Alaska Air vs. United Airlines Holdings | Alaska Air vs. American Airlines Group | Alaska Air vs. JetBlue Airways Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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