Correlation Between AEGEAN AIRLINES and National Beverage
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and National Beverage 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 AEGEAN AIRLINES and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and National Beverage Corp, you can compare the effects of market volatilities on AEGEAN AIRLINES and National Beverage 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 AEGEAN AIRLINES with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and National Beverage.
Diversification Opportunities for AEGEAN AIRLINES and National Beverage
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AEGEAN and National is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp and AEGEAN AIRLINES 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 AEGEAN AIRLINES are associated (or correlated) with National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and National Beverage go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and National Beverage
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to under-perform the National Beverage. But the stock apears to be less risky and, when comparing its historical volatility, AEGEAN AIRLINES is 1.16 times less risky than National Beverage. The stock trades about -0.02 of its potential returns per unit of risk. The National Beverage Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,950 in National Beverage Corp on November 3, 2024 and sell it today you would earn a total of 90.00 from holding National Beverage Corp or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. National Beverage Corp
Performance |
| Timeline |
| AEGEAN AIRLINES |
| National Beverage Corp |
AEGEAN AIRLINES and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and National Beverage
The main advantage of trading using opposite AEGEAN AIRLINES and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| AEGEAN AIRLINES vs. Highlight Communications AG | AEGEAN AIRLINES vs. Silicon Motion Technology | AEGEAN AIRLINES vs. Chunghwa Telecom Co | AEGEAN AIRLINES vs. Mitsubishi Gas Chemical |
| National Beverage vs. INVITATION HOMES DL | National Beverage vs. KENEDIX OFFICE INV | National Beverage vs. EEDUCATION ALBERT AB | National Beverage vs. betterU Education Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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