Correlation Between FlyExclusive, and Allegiant Travel

Can any of the company-specific risk be diversified away by investing in both FlyExclusive, and Allegiant Travel 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 FlyExclusive, and Allegiant Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between flyExclusive, and Allegiant Travel, you can compare the effects of market volatilities on FlyExclusive, and Allegiant Travel 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 FlyExclusive, with a short position of Allegiant Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlyExclusive, and Allegiant Travel.

Diversification Opportunities for FlyExclusive, and Allegiant Travel

-0.68

Correlation Coefficient

FlyExclusive,  Allegiant Travel

Excellent diversification

The 3 months correlation between FlyExclusive, and Allegiant is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding flyExclusive, and Allegiant Travel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegiant Travel and FlyExclusive, 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 flyExclusive, are associated (or correlated) with Allegiant Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegiant Travel has no effect on the direction of FlyExclusive, i.e., FlyExclusive, and Allegiant Travel go up and down completely randomly.

Pair Corralation between FlyExclusive, and Allegiant Travel

Given the investment horizon of 90 days flyExclusive, is expected to under-perform the Allegiant Travel. In addition to that, FlyExclusive, is 2.2 times more volatile than Allegiant Travel. It trades about -0.01 of its total potential returns per unit of risk. Allegiant Travel is currently generating about 0.02 per unit of volatility. If you would invest  8,112  in Allegiant Travel on September 24, 2024 and sell it today you would earn a total of  335.00  from holding Allegiant Travel or generate 4.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

flyExclusive,  vs.  Allegiant Travel

flyExclusive,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days flyExclusive, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Allegiant Travel

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allegiant Travel are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, Allegiant Travel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FlyExclusive, and Allegiant Travel

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

The idea behind flyExclusive, and Allegiant Travel 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.