Correlation Between AEGEAN AIRLINES and Highlight Communications
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and Highlight 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 Highlight 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 Highlight Communications AG, you can compare the effects of market volatilities on AEGEAN AIRLINES and Highlight 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 Highlight Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and Highlight Communications.
Diversification Opportunities for AEGEAN AIRLINES and Highlight Communications
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AEGEAN and Highlight is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and Highlight Communications AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlight 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 Highlight Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlight Communications has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and Highlight Communications go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and Highlight Communications
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 0.71 times more return on investment than Highlight Communications. However, AEGEAN AIRLINES is 1.42 times less risky than Highlight Communications. It trades about 0.02 of its potential returns per unit of risk. Highlight Communications AG is currently generating about -0.09 per unit of risk. If you would invest 897.00 in AEGEAN AIRLINES on September 1, 2024 and sell it today you would earn a total of 53.00 from holding AEGEAN AIRLINES or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. Highlight Communications AG
Performance |
| Timeline |
| AEGEAN AIRLINES |
| Highlight Communications |
AEGEAN AIRLINES and Highlight Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and Highlight Communications
The main advantage of trading using opposite AEGEAN AIRLINES and Highlight Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, Highlight 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 Highlight Communications will offset losses from the drop in Highlight Communications' long position.| AEGEAN AIRLINES vs. SIVERS SEMICONDUCTORS AB | AEGEAN AIRLINES vs. Darden Restaurants | AEGEAN AIRLINES vs. Reliance Steel Aluminum | AEGEAN AIRLINES vs. Q2M Managementberatung AG |
| Highlight Communications vs. CNVISION MEDIA | Highlight Communications vs. PLAYTIKA HOLDING DL 01 | Highlight Communications vs. Seven West Media | Highlight Communications vs. Playa Hotels Resorts |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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