Correlation Between AEGEAN AIRLINES and Five Below
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and Five Below 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 Five Below into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and Five Below, you can compare the effects of market volatilities on AEGEAN AIRLINES and Five Below 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 Five Below. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and Five Below.
Diversification Opportunities for AEGEAN AIRLINES and Five Below
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AEGEAN and Five is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and Five Below in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Below 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 Five Below. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Below has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and Five Below go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and Five Below
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 0.45 times more return on investment than Five Below. However, AEGEAN AIRLINES is 2.24 times less risky than Five Below. It trades about 0.2 of its potential returns per unit of risk. Five Below is currently generating about 0.05 per unit of risk. If you would invest 950.00 in AEGEAN AIRLINES on October 30, 2024 and sell it today you would earn a total of 111.00 from holding AEGEAN AIRLINES or generate 11.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.37% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. Five Below
Performance |
| Timeline |
| AEGEAN AIRLINES |
| Five Below |
AEGEAN AIRLINES and Five Below Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and Five Below
The main advantage of trading using opposite AEGEAN AIRLINES and Five Below positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, Five Below 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 Five Below will offset losses from the drop in Five Below's long position.| AEGEAN AIRLINES vs. CN MODERN DAIRY | AEGEAN AIRLINES vs. COFCO Joycome Foods | AEGEAN AIRLINES vs. CAL MAINE FOODS | AEGEAN AIRLINES vs. Yanzhou Coal Mining |
| Five Below vs. RCI Hospitality Holdings | Five Below vs. PPHE HOTEL GROUP | Five Below vs. PURETECH HEALTH PLC | Five Below vs. Phibro Animal Health |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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