Correlation Between Alaska Air and American National
Can any of the company-specific risk be diversified away by investing in both Alaska Air and American National 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 American National 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 American National Insurance, you can compare the effects of market volatilities on Alaska Air and American National 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 American National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and American National.
Diversification Opportunities for Alaska Air and American National
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alaska and American is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and American National Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American National 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 American National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American National has no effect on the direction of Alaska Air i.e., Alaska Air and American National go up and down completely randomly.
Pair Corralation between Alaska Air and American National
If you would invest 4,713 in Alaska Air Group on February 15, 2024 and sell it today you would lose (335.00) from holding Alaska Air Group or give up 7.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 0.2% |
Values | Daily Returns |
Alaska Air Group vs. American National Insurance
Performance |
Timeline |
Alaska Air Group |
American National |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alaska Air and American National Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alaska Air and American National
The main advantage of trading using opposite Alaska Air and American National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, American National 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 American National will offset losses from the drop in American National'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 |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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