Correlation Between AEGEAN AIRLINES and Dolby Laboratories
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and Dolby Laboratories 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 Dolby Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and Dolby Laboratories, you can compare the effects of market volatilities on AEGEAN AIRLINES and Dolby Laboratories 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 Dolby Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and Dolby Laboratories.
Diversification Opportunities for AEGEAN AIRLINES and Dolby Laboratories
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AEGEAN and Dolby is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and Dolby Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolby Laboratories 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 Dolby Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolby Laboratories has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and Dolby Laboratories go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and Dolby Laboratories
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 84.39 times less return on investment than Dolby Laboratories. But when comparing it to its historical volatility, AEGEAN AIRLINES is 1.19 times less risky than Dolby Laboratories. It trades about 0.0 of its potential returns per unit of risk. Dolby Laboratories is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,590 in Dolby Laboratories on November 3, 2024 and sell it today you would earn a total of 1,210 from holding Dolby Laboratories or generate 18.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. Dolby Laboratories
Performance |
| Timeline |
| AEGEAN AIRLINES |
| Dolby Laboratories |
AEGEAN AIRLINES and Dolby Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and Dolby Laboratories
The main advantage of trading using opposite AEGEAN AIRLINES and Dolby Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, Dolby Laboratories 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 Dolby Laboratories will offset losses from the drop in Dolby Laboratories' long position.| AEGEAN AIRLINES vs. COVIVIO HOTELS INH | AEGEAN AIRLINES vs. Playa Hotels Resorts | AEGEAN AIRLINES vs. Dalata Hotel Group | AEGEAN AIRLINES vs. Gol Intelligent Airlines |
| Dolby Laboratories vs. Marie Brizard Wine | Dolby Laboratories vs. RCS MediaGroup SpA | Dolby Laboratories vs. Perseus Mining Limited | Dolby Laboratories vs. Flutter Entertainment PLC |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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