Correlation Between AEGEAN AIRLINES and Federal Agricultural
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and Federal Agricultural 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 Federal Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and Federal Agricultural Mortgage, you can compare the effects of market volatilities on AEGEAN AIRLINES and Federal Agricultural 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 Federal Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and Federal Agricultural.
Diversification Opportunities for AEGEAN AIRLINES and Federal Agricultural
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AEGEAN and Federal is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and Federal Agricultural Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Agricultural 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 Federal Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Agricultural has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and Federal Agricultural go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and Federal Agricultural
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 0.75 times more return on investment than Federal Agricultural. However, AEGEAN AIRLINES is 1.34 times less risky than Federal Agricultural. It trades about 0.18 of its potential returns per unit of risk. Federal Agricultural Mortgage is currently generating about -0.25 per unit of risk. If you would invest 1,005 in AEGEAN AIRLINES on October 11, 2024 and sell it today you would earn a total of 37.00 from holding AEGEAN AIRLINES or generate 3.68% 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. Federal Agricultural Mortgage
Performance |
| Timeline |
| AEGEAN AIRLINES |
| Federal Agricultural |
AEGEAN AIRLINES and Federal Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and Federal Agricultural
The main advantage of trading using opposite AEGEAN AIRLINES and Federal Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, Federal Agricultural 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 Federal Agricultural will offset losses from the drop in Federal Agricultural's long position.| AEGEAN AIRLINES vs. T MOBILE INCDL 00001 | AEGEAN AIRLINES vs. INTERSHOP Communications Aktiengesellschaft | AEGEAN AIRLINES vs. Penn National Gaming | AEGEAN AIRLINES vs. CONTAGIOUS GAMING INC |
| Federal Agricultural vs. China Eastern Airlines | Federal Agricultural vs. AEGEAN AIRLINES | Federal Agricultural vs. ADRIATIC METALS LS 013355 | Federal Agricultural vs. SINGAPORE AIRLINES |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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