Correlation Between Amneal Pharmaceuticals and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both Amneal Pharmaceuticals 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 Amneal Pharmaceuticals and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amneal Pharmaceuticals and AEGEAN AIRLINES, you can compare the effects of market volatilities on Amneal Pharmaceuticals 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 Amneal Pharmaceuticals with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amneal Pharmaceuticals and AEGEAN AIRLINES.
Diversification Opportunities for Amneal Pharmaceuticals and AEGEAN AIRLINES
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amneal and AEGEAN is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Amneal Pharmaceuticals and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and Amneal Pharmaceuticals 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 Amneal Pharmaceuticals 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 Amneal Pharmaceuticals i.e., Amneal Pharmaceuticals and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between Amneal Pharmaceuticals and AEGEAN AIRLINES
Assuming the 90 days horizon Amneal Pharmaceuticals is expected to generate 1.86 times more return on investment than AEGEAN AIRLINES. However, Amneal Pharmaceuticals is 1.86 times more volatile than AEGEAN AIRLINES. It trades about 0.07 of its potential returns per unit of risk. AEGEAN AIRLINES is currently generating about -0.04 per unit of risk. If you would invest 595.00 in Amneal Pharmaceuticals on September 26, 2024 and sell it today you would earn a total of 135.00 from holding Amneal Pharmaceuticals or generate 22.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amneal Pharmaceuticals vs. AEGEAN AIRLINES
Performance |
| Timeline |
| Amneal Pharmaceuticals |
| AEGEAN AIRLINES |
Amneal Pharmaceuticals and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amneal Pharmaceuticals and AEGEAN AIRLINES
The main advantage of trading using opposite Amneal Pharmaceuticals and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amneal Pharmaceuticals 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.| Amneal Pharmaceuticals vs. KRAKATAU STEEL B | Amneal Pharmaceuticals vs. BLUESCOPE STEEL | Amneal Pharmaceuticals vs. LPKF Laser Electronics | Amneal Pharmaceuticals vs. Meiko Electronics Co |
| AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Microsoft | AEGEAN AIRLINES vs. Microsoft |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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