Correlation Between AEGEAN AIRLINES and GAMESTOP
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and GAMESTOP 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 GAMESTOP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and GAMESTOP, you can compare the effects of market volatilities on AEGEAN AIRLINES and GAMESTOP 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 GAMESTOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and GAMESTOP.
Diversification Opportunities for AEGEAN AIRLINES and GAMESTOP
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AEGEAN and GAMESTOP is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP 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 GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and GAMESTOP go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and GAMESTOP
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 0.36 times more return on investment than GAMESTOP. However, AEGEAN AIRLINES is 2.77 times less risky than GAMESTOP. It trades about 0.15 of its potential returns per unit of risk. GAMESTOP is currently generating about 0.01 per unit of risk. If you would invest 965.00 in AEGEAN AIRLINES on September 12, 2024 and sell it today you would earn a total of 40.00 from holding AEGEAN AIRLINES or generate 4.15% 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. GAMESTOP
Performance |
| Timeline |
| AEGEAN AIRLINES |
| GAMESTOP |
AEGEAN AIRLINES and GAMESTOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and GAMESTOP
The main advantage of trading using opposite AEGEAN AIRLINES and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, GAMESTOP 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 GAMESTOP will offset losses from the drop in GAMESTOP's long position.| AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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