Correlation Between AEGEAN AIRLINES and SINGAPORE AIRLINES
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and SINGAPORE AIRLINES 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 SINGAPORE AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and SINGAPORE AIRLINES, you can compare the effects of market volatilities on AEGEAN AIRLINES and SINGAPORE AIRLINES 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 SINGAPORE AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and SINGAPORE AIRLINES.
Diversification Opportunities for AEGEAN AIRLINES and SINGAPORE AIRLINES
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AEGEAN and SINGAPORE is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and SINGAPORE AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE AIRLINES 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 SINGAPORE AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE AIRLINES has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and SINGAPORE AIRLINES go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and SINGAPORE AIRLINES
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 1.53 times more return on investment than SINGAPORE AIRLINES. However, AEGEAN AIRLINES is 1.53 times more volatile than SINGAPORE AIRLINES. It trades about 0.04 of its potential returns per unit of risk. SINGAPORE AIRLINES is currently generating about 0.06 per unit of risk. If you would invest 702.00 in AEGEAN AIRLINES on August 24, 2024 and sell it today you would earn a total of 232.00 from holding AEGEAN AIRLINES or generate 33.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. SINGAPORE AIRLINES
Performance |
| Timeline |
| AEGEAN AIRLINES |
| SINGAPORE AIRLINES |
AEGEAN AIRLINES and SINGAPORE AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and SINGAPORE AIRLINES
The main advantage of trading using opposite AEGEAN AIRLINES and SINGAPORE AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, SINGAPORE AIRLINES 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 SINGAPORE AIRLINES will offset losses from the drop in SINGAPORE AIRLINES's long position.| AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc |
| SINGAPORE AIRLINES vs. COMINTL BANK ADR1 | SINGAPORE AIRLINES vs. DOCDATA | SINGAPORE AIRLINES vs. INFORMATION SVC GRP | SINGAPORE AIRLINES vs. QBE Insurance Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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