Correlation Between AEGEAN AIRLINES and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and Singapore Telecommunicatio 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 Telecommunicatio 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 Telecommunications Limited, you can compare the effects of market volatilities on AEGEAN AIRLINES and Singapore Telecommunicatio 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 Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and Singapore Telecommunicatio.
Diversification Opportunities for AEGEAN AIRLINES and Singapore Telecommunicatio
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between AEGEAN and Singapore is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio 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 Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and Singapore Telecommunicatio
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 2.68 times less return on investment than Singapore Telecommunicatio. In addition to that, AEGEAN AIRLINES is 1.21 times more volatile than Singapore Telecommunications Limited. It trades about 0.02 of its total potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.06 per unit of volatility. If you would invest 157.00 in Singapore Telecommunications Limited on September 1, 2024 and sell it today you would earn a total of 55.00 from holding Singapore Telecommunications Limited or generate 35.03% 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 Telecommunications L
Performance |
| Timeline |
| AEGEAN AIRLINES |
| Singapore Telecommunicatio |
AEGEAN AIRLINES and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and Singapore Telecommunicatio
The main advantage of trading using opposite AEGEAN AIRLINES and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, Singapore Telecommunicatio 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 Telecommunicatio will offset losses from the drop in Singapore Telecommunicatio's 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 |
| Singapore Telecommunicatio vs. Monster Beverage Corp | Singapore Telecommunicatio vs. United Breweries Co | Singapore Telecommunicatio vs. ARISTOCRAT LEISURE | Singapore Telecommunicatio vs. ePlay Digital |
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 Stocks Directory module to find actively traded stocks across global markets.
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