Correlation Between AEGEAN AIRLINES and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and JD SPORTS 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 JD SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and JD SPORTS FASH, you can compare the effects of market volatilities on AEGEAN AIRLINES and JD SPORTS 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 JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and JD SPORTS.
Diversification Opportunities for AEGEAN AIRLINES and JD SPORTS
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AEGEAN and 9JD is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and JD SPORTS FASH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD SPORTS FASH 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 JD SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD SPORTS FASH has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and JD SPORTS go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and JD SPORTS
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 0.47 times more return on investment than JD SPORTS. However, AEGEAN AIRLINES is 2.14 times less risky than JD SPORTS. It trades about -0.17 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about -0.31 per unit of risk. If you would invest 1,048 in AEGEAN AIRLINES on August 25, 2024 and sell it today you would lose (114.00) from holding AEGEAN AIRLINES or give up 10.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. JD SPORTS FASH
Performance |
| Timeline |
| AEGEAN AIRLINES |
| JD SPORTS FASH |
AEGEAN AIRLINES and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and JD SPORTS
The main advantage of trading using opposite AEGEAN AIRLINES and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, JD SPORTS 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 JD SPORTS will offset losses from the drop in JD SPORTS's long position.| AEGEAN AIRLINES vs. H FARM SPA | AEGEAN AIRLINES vs. North American Construction | AEGEAN AIRLINES vs. MUTUIONLINE | AEGEAN AIRLINES vs. Sumitomo Mitsui Construction |
| JD SPORTS vs. FAST RETAIL ADR | JD SPORTS vs. AOYAMA TRADING | JD SPORTS vs. J JILL INC | JD SPORTS vs. Superior Plus 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |