Correlation Between AEGEAN AIRLINES and Amazon
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and Amazon 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 Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and Amazon Inc, you can compare the effects of market volatilities on AEGEAN AIRLINES and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and Amazon.
Diversification Opportunities for AEGEAN AIRLINES and Amazon
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AEGEAN and Amazon is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and Amazon go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and Amazon
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to under-perform the Amazon. But the stock apears to be less risky and, when comparing its historical volatility, AEGEAN AIRLINES is 1.2 times less risky than Amazon. The stock trades about -0.04 of its potential returns per unit of risk. The Amazon Inc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 17,256 in Amazon Inc on October 24, 2024 and sell it today you would earn a total of 4,919 from holding Amazon Inc or generate 28.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. Amazon Inc
Performance |
| Timeline |
| AEGEAN AIRLINES |
| Amazon Inc |
AEGEAN AIRLINES and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and Amazon
The main advantage of trading using opposite AEGEAN AIRLINES and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc |
| Amazon vs. AEGEAN AIRLINES | Amazon vs. American Airlines Group | Amazon vs. International Consolidated Airlines | Amazon vs. ELECTRONIC ARTS |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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