Correlation Between Alaska Air and Minor International

Can any of the company-specific risk be diversified away by investing in both Alaska Air and Minor International 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 Minor International 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 Minor International PCL, you can compare the effects of market volatilities on Alaska Air and Minor International 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 Minor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Air and Minor International.

Diversification Opportunities for Alaska Air and Minor International

0.13

Correlation Coefficient

Alaska Air  Minor International

Average diversification

The 3 months correlation between Alaska and Minor is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Air Group and Minor International PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minor International PCL 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 Minor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minor International PCL has no effect on the direction of Alaska Air i.e., Alaska Air and Minor International go up and down completely randomly.

Pair Corralation between Alaska Air and Minor International

If you would invest  5,288  in Alaska Air Group on September 15, 2024 and sell it today you would earn a total of  969.00  from holding Alaska Air Group or generate 18.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Alaska Air Group  vs.  Minor International PCL

Alaska Air Group

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alaska Air Group are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal essential indicators, Alaska Air disclosed solid returns over the last few months and may actually be approaching a breakup point.

Minor International PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minor International PCL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Minor International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alaska Air and Minor International

The main advantage of trading using opposite Alaska Air and Minor International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Air position performs unexpectedly, Minor International 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 Minor International will offset losses from the drop in Minor International's long position.

The idea behind Alaska Air Group and Minor International PCL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.