Correlation Between AEGEAN AIRLINES and AECOM TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and AECOM TECHNOLOGY, you can compare the effects of market volatilities on AEGEAN AIRLINES and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and AECOM TECHNOLOGY.
Diversification Opportunities for AEGEAN AIRLINES and AECOM TECHNOLOGY
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AEGEAN and AECOM is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and AECOM TECHNOLOGY go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and AECOM TECHNOLOGY
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 2.49 times less return on investment than AECOM TECHNOLOGY. But when comparing it to its historical volatility, AEGEAN AIRLINES is 1.2 times less risky than AECOM TECHNOLOGY. It trades about 0.04 of its potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,626 in AECOM TECHNOLOGY on October 14, 2024 and sell it today you would earn a total of 774.00 from holding AECOM TECHNOLOGY or generate 8.04% 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. AECOM TECHNOLOGY
Performance |
| Timeline |
| AEGEAN AIRLINES |
| AECOM TECHNOLOGY |
AEGEAN AIRLINES and AECOM TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and AECOM TECHNOLOGY
The main advantage of trading using opposite AEGEAN AIRLINES and AECOM TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, AECOM TECHNOLOGY 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 AECOM TECHNOLOGY will offset losses from the drop in AECOM TECHNOLOGY's long position.| AEGEAN AIRLINES vs. TITANIUM TRANSPORTGROUP | AEGEAN AIRLINES vs. Yuexiu Transport Infrastructure | AEGEAN AIRLINES vs. Liberty Broadband | AEGEAN AIRLINES vs. NAGOYA RAILROAD |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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