Correlation Between CN MODERN and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both CN MODERN and AEGEAN AIRLINES 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 CN MODERN and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN MODERN DAIRY and AEGEAN AIRLINES, you can compare the effects of market volatilities on CN MODERN and AEGEAN AIRLINES 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 CN MODERN with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and AEGEAN AIRLINES.
Diversification Opportunities for CN MODERN and AEGEAN AIRLINES
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between 07M and AEGEAN is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and CN MODERN 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 CN MODERN DAIRY are associated (or correlated) with AEGEAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEGEAN AIRLINES has no effect on the direction of CN MODERN i.e., CN MODERN and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between CN MODERN and AEGEAN AIRLINES
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 3.86 times more return on investment than AEGEAN AIRLINES. However, CN MODERN is 3.86 times more volatile than AEGEAN AIRLINES. It trades about 0.16 of its potential returns per unit of risk. AEGEAN AIRLINES is currently generating about 0.35 per unit of risk. If you would invest 9.65 in CN MODERN DAIRY on September 22, 2024 and sell it today you would earn a total of 1.35 from holding CN MODERN DAIRY or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. AEGEAN AIRLINES
Performance |
| Timeline |
| CN MODERN DAIRY |
| AEGEAN AIRLINES |
CN MODERN and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and AEGEAN AIRLINES
The main advantage of trading using opposite CN MODERN and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, AEGEAN AIRLINES 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 AEGEAN AIRLINES will offset losses from the drop in AEGEAN AIRLINES's long position.The idea behind CN MODERN DAIRY and AEGEAN AIRLINES 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.| AEGEAN AIRLINES vs. CN MODERN DAIRY | AEGEAN AIRLINES vs. Performance Food Group | AEGEAN AIRLINES vs. Austevoll Seafood ASA | AEGEAN AIRLINES vs. AUSTEVOLL SEAFOOD |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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