Correlation Between Hawaiian Holdings and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Hawaiian Holdings 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 Hawaiian Holdings and Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Holdings and Alaska Air Group, you can compare the effects of market volatilities on Hawaiian Holdings 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 Hawaiian Holdings with a short position of Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Holdings and Alaska Air.
Diversification Opportunities for Hawaiian Holdings and Alaska Air
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hawaiian and Alaska is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Holdings 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 Hawaiian Holdings 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 Hawaiian Holdings 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 Hawaiian Holdings i.e., Hawaiian Holdings and Alaska Air go up and down completely randomly.
Pair Corralation between Hawaiian Holdings and Alaska Air
Allowing for the 90-day total investment horizon Hawaiian Holdings is expected to generate 6.93 times more return on investment than Alaska Air. However, Hawaiian Holdings is 6.93 times more volatile than Alaska Air Group. It trades about 0.06 of its potential returns per unit of risk. Alaska Air Group is currently generating about 0.02 per unit of risk. If you would invest 858.00 in Hawaiian Holdings on December 29, 2023 and sell it today you would earn a total of 475.00 from holding Hawaiian Holdings or generate 55.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hawaiian Holdings vs. Alaska Air Group
Performance |
Timeline |
Hawaiian Holdings |
Alaska Air Group |
Hawaiian Holdings and Alaska Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hawaiian Holdings and Alaska Air
The main advantage of trading using opposite Hawaiian Holdings and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Holdings 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.Hawaiian Holdings vs. Canadian Pacific Railway | Hawaiian Holdings vs. Daseke Inc | Hawaiian Holdings vs. Marten Transport | Hawaiian Holdings vs. Werner Enterprises |
Alaska Air vs. Canadian Pacific Railway | Alaska Air vs. Daseke Inc | Alaska Air vs. Marten Transport | Alaska Air vs. Werner Enterprises |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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