Correlation Between Alaska Air and China Eastern
Can any of the company-specific risk be diversified away by investing in both Alaska Air and China Eastern 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 China Eastern 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 China Eastern Airlines, you can compare the effects of market volatilities on Alaska Air and China Eastern 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 China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and China Eastern.
Diversification Opportunities for Alaska Air and China Eastern
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alaska and China is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines 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 China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of Alaska Air i.e., Alaska Air and China Eastern go up and down completely randomly.
Pair Corralation between Alaska Air and China Eastern
If you would invest 3,216 in Alaska Air Group on January 17, 2024 and sell it today you would earn a total of 882.00 from holding Alaska Air Group or generate 27.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.81% |
| Values | Daily Returns |
Alaska Air Group vs. China Eastern Airlines
Performance |
| Timeline |
| Alaska Air Group |
| China Eastern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alaska Air and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Air and China Eastern
The main advantage of trading using opposite Alaska Air and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, China Eastern 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 China Eastern will offset losses from the drop in China Eastern'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 |
| China Eastern vs. Datadog | China Eastern vs. Cadence Design Systems | China Eastern vs. Pearson PLC ADR | China Eastern vs. Definitive Healthcare 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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