Correlation Between AEGEAN AIRLINES and DISTRICT METALS
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and DISTRICT METALS 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 DISTRICT METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and DISTRICT METALS, you can compare the effects of market volatilities on AEGEAN AIRLINES and DISTRICT METALS 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 DISTRICT METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and DISTRICT METALS.
Diversification Opportunities for AEGEAN AIRLINES and DISTRICT METALS
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between AEGEAN and DISTRICT is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and DISTRICT METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DISTRICT METALS 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 DISTRICT METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DISTRICT METALS has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and DISTRICT METALS go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and DISTRICT METALS
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 4.65 times less return on investment than DISTRICT METALS. But when comparing it to its historical volatility, AEGEAN AIRLINES is 3.2 times less risky than DISTRICT METALS. It trades about 0.11 of its potential returns per unit of risk. DISTRICT METALS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 21.00 in DISTRICT METALS on September 14, 2024 and sell it today you would earn a total of 3.00 from holding DISTRICT METALS or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. DISTRICT METALS
Performance |
| Timeline |
| AEGEAN AIRLINES |
| DISTRICT METALS |
AEGEAN AIRLINES and DISTRICT METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and DISTRICT METALS
The main advantage of trading using opposite AEGEAN AIRLINES and DISTRICT METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, DISTRICT METALS 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 DISTRICT METALS will offset losses from the drop in DISTRICT METALS's long position.| AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc |
| DISTRICT METALS vs. American Lithium Corp | DISTRICT METALS vs. ADRIATIC METALS LS 013355 | DISTRICT METALS vs. Superior Plus Corp | DISTRICT METALS vs. SIVERS SEMICONDUCTORS AB |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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