Correlation Between AEGEAN AIRLINES and Air Transport
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and Air Transport 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 Air Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and Air Transport Services, you can compare the effects of market volatilities on AEGEAN AIRLINES and Air Transport 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 Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and Air Transport.
Diversification Opportunities for AEGEAN AIRLINES and Air Transport
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AEGEAN and Air is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services 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 Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and Air Transport go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and Air Transport
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 2.66 times more return on investment than Air Transport. However, AEGEAN AIRLINES is 2.66 times more volatile than Air Transport Services. It trades about 0.16 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.24 per unit of risk. If you would invest 991.00 in AEGEAN AIRLINES on October 13, 2024 and sell it today you would earn a total of 33.00 from holding AEGEAN AIRLINES or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. Air Transport Services
Performance |
| Timeline |
| AEGEAN AIRLINES |
| Air Transport Services |
AEGEAN AIRLINES and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and Air Transport
The main advantage of trading using opposite AEGEAN AIRLINES and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, Air Transport 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 Air Transport will offset losses from the drop in Air Transport's long position.| AEGEAN AIRLINES vs. CLOVER HEALTH INV | AEGEAN AIRLINES vs. MPH Health Care | AEGEAN AIRLINES vs. YOOMA WELLNESS INC | AEGEAN AIRLINES vs. DFS Furniture PLC |
| Air Transport vs. Superior Plus Corp | Air Transport vs. NMI Holdings | Air Transport vs. SIVERS SEMICONDUCTORS AB | Air Transport vs. Talanx AG |
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 Stocks Directory module to find actively traded stocks across global markets.
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