Correlation Between AEGEAN AIRLINES and Consolidated Communications
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and Consolidated Communications 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 Consolidated Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and Consolidated Communications Holdings, you can compare the effects of market volatilities on AEGEAN AIRLINES and Consolidated Communications 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 Consolidated Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and Consolidated Communications.
Diversification Opportunities for AEGEAN AIRLINES and Consolidated Communications
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AEGEAN and Consolidated is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and Consolidated Communications Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Communications 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 Consolidated Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Communications has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and Consolidated Communications go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and Consolidated Communications
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to under-perform the Consolidated Communications. In addition to that, AEGEAN AIRLINES is 1.58 times more volatile than Consolidated Communications Holdings. It trades about -0.2 of its total potential returns per unit of risk. Consolidated Communications Holdings is currently generating about 0.18 per unit of volatility. If you would invest 426.00 in Consolidated Communications Holdings on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Consolidated Communications Holdings or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. Consolidated Communications Ho
Performance |
| Timeline |
| AEGEAN AIRLINES |
| Consolidated Communications |
AEGEAN AIRLINES and Consolidated Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and Consolidated Communications
The main advantage of trading using opposite AEGEAN AIRLINES and Consolidated Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, Consolidated Communications 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 Consolidated Communications will offset losses from the drop in Consolidated Communications' long position.| AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Microsoft |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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