Correlation Between AEGEAN AIRLINES and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and INSURANCE AUST 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 INSURANCE AUST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and INSURANCE AUST GRP, you can compare the effects of market volatilities on AEGEAN AIRLINES and INSURANCE AUST 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 INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and INSURANCE AUST.
Diversification Opportunities for AEGEAN AIRLINES and INSURANCE AUST
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AEGEAN and INSURANCE is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and INSURANCE AUST go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and INSURANCE AUST
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 2.02 times less return on investment than INSURANCE AUST. In addition to that, AEGEAN AIRLINES is 1.01 times more volatile than INSURANCE AUST GRP. It trades about 0.11 of its total potential returns per unit of risk. INSURANCE AUST GRP is currently generating about 0.22 per unit of volatility. If you would invest 436.00 in INSURANCE AUST GRP on November 1, 2024 and sell it today you would earn a total of 94.00 from holding INSURANCE AUST GRP or generate 21.56% 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. INSURANCE AUST GRP
Performance |
| Timeline |
| AEGEAN AIRLINES |
| INSURANCE AUST GRP |
AEGEAN AIRLINES and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and INSURANCE AUST
The main advantage of trading using opposite AEGEAN AIRLINES and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, INSURANCE AUST 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 INSURANCE AUST will offset losses from the drop in INSURANCE AUST's long position.| AEGEAN AIRLINES vs. Singapore Reinsurance | AEGEAN AIRLINES vs. MACOM Technology Solutions | AEGEAN AIRLINES vs. Kingdee International Software | AEGEAN AIRLINES vs. Charter Communications |
| INSURANCE AUST vs. AEGEAN AIRLINES | INSURANCE AUST vs. Daido Steel Co | INSURANCE AUST vs. Tianjin Capital Environmental | INSURANCE AUST vs. NORTHEAST UTILITIES |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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