Correlation Between International Consolidated and Alaska Air
Can any of the company-specific risk be diversified away by investing in both International Consolidated 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 International Consolidated and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and Alaska Air Group, you can compare the effects of market volatilities on International Consolidated 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 International Consolidated with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Alaska Air.
Diversification Opportunities for International Consolidated and Alaska Air
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between International and Alaska is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air 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 International Consolidated 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 International Consolidated Airlines 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 International Consolidated i.e., International Consolidated and Alaska Air go up and down completely randomly.
Pair Corralation between International Consolidated and Alaska Air
Assuming the 90 days horizon International Consolidated is expected to generate 11.51 times less return on investment than Alaska Air. In addition to that, International Consolidated is 1.03 times more volatile than Alaska Air Group. It trades about 0.03 of its total potential returns per unit of risk. Alaska Air Group is currently generating about 0.3 per unit of volatility. If you would invest 3,878 in Alaska Air Group on January 20, 2024 and sell it today you would earn a total of 566.00 from holding Alaska Air Group or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
International Consolidated Air vs. Alaska Air Group
Performance |
| Timeline |
| International Consolidated |
| Alaska Air Group |
International Consolidated and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and Alaska Air
The main advantage of trading using opposite International Consolidated and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated 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.| International Consolidated vs. V2X Inc | International Consolidated vs. National Presto Industries | International Consolidated vs. Kaman | International Consolidated vs. Woodward |
| 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.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |