Correlation Between Dow and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Dow 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 Dow and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Inc and Aegean Airlines SA, you can compare the effects of market volatilities on Dow 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 Dow with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow and Aegean Airlines.
Diversification Opportunities for Dow and Aegean Airlines
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Aegean is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dow Inc and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA and Dow 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 Dow Inc 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 SA has no effect on the direction of Dow i.e., Dow and Aegean Airlines go up and down completely randomly.
Pair Corralation between Dow and Aegean Airlines
Assuming the 90 days horizon Dow Inc is expected to under-perform the Aegean Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Dow Inc is 1.67 times less risky than Aegean Airlines. The stock trades about -0.03 of its potential returns per unit of risk. The Aegean Airlines SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 655.00 in Aegean Airlines SA on November 27, 2024 and sell it today you would earn a total of 446.00 from holding Aegean Airlines SA or generate 68.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Inc vs. Aegean Airlines SA
Performance |
| Timeline |
| Dow Inc |
| Aegean Airlines SA |
Dow and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dow and Aegean Airlines
The main advantage of trading using opposite Dow and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow 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' long position.| Dow vs. SmarTone Telecommunications Holdings | Dow vs. Geely Automobile Holdings | Dow vs. GEELY AUTOMOBILE | Dow vs. MAVEN WIRELESS SWEDEN |
| Aegean Airlines vs. FUYO GENERAL LEASE | Aegean Airlines vs. ALBIS LEASING AG | Aegean Airlines vs. Hyatt Hotels | Aegean Airlines vs. PPHE HOTEL GROUP |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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