Correlation Between AEGEAN AIRLINES and SCANSOURCE (SC3SG)
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and SCANSOURCE, you can compare the effects of market volatilities on AEGEAN AIRLINES and SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and SCANSOURCE (SC3SG).
Diversification Opportunities for AEGEAN AIRLINES and SCANSOURCE (SC3SG)
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AEGEAN and SCANSOURCE is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANSOURCE (SC3SG) has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and SCANSOURCE (SC3SG) go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and SCANSOURCE (SC3SG)
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 5.63 times less return on investment than SCANSOURCE (SC3SG). But when comparing it to its historical volatility, AEGEAN AIRLINES is 1.13 times less risky than SCANSOURCE (SC3SG). It trades about 0.01 of its potential returns per unit of risk. SCANSOURCE is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,840 in SCANSOURCE on September 2, 2024 and sell it today you would earn a total of 1,900 from holding SCANSOURCE or generate 66.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. SCANSOURCE
Performance |
| Timeline |
| AEGEAN AIRLINES |
| SCANSOURCE (SC3SG) |
AEGEAN AIRLINES and SCANSOURCE (SC3SG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and SCANSOURCE (SC3SG)
The main advantage of trading using opposite AEGEAN AIRLINES and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG) will offset losses from the drop in SCANSOURCE (SC3SG)'s long position.| AEGEAN AIRLINES vs. Reinsurance Group of | AEGEAN AIRLINES vs. Iridium Communications | AEGEAN AIRLINES vs. Universal Insurance Holdings | AEGEAN AIRLINES vs. Cogent Communications Holdings |
| SCANSOURCE (SC3SG) vs. SIVERS SEMICONDUCTORS AB | SCANSOURCE (SC3SG) vs. Darden Restaurants | SCANSOURCE (SC3SG) vs. Reliance Steel Aluminum | SCANSOURCE (SC3SG) vs. Q2M Managementberatung AG |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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