Correlation Between AEGEAN AIRLINES and Walmart
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and Walmart 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 Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and Walmart, you can compare the effects of market volatilities on AEGEAN AIRLINES and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and Walmart.
Diversification Opportunities for AEGEAN AIRLINES and Walmart
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AEGEAN and Walmart is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and Walmart go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and Walmart
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 0.85 times more return on investment than Walmart. However, AEGEAN AIRLINES is 1.18 times less risky than Walmart. It trades about 0.28 of its potential returns per unit of risk. Walmart is currently generating about 0.04 per unit of risk. If you would invest 940.00 in AEGEAN AIRLINES on September 25, 2024 and sell it today you would earn a total of 62.00 from holding AEGEAN AIRLINES or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. Walmart
Performance |
| Timeline |
| AEGEAN AIRLINES |
| Walmart |
AEGEAN AIRLINES and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and Walmart
The main advantage of trading using opposite AEGEAN AIRLINES and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Microsoft | AEGEAN AIRLINES vs. Microsoft |
| Walmart vs. AEGEAN AIRLINES | Walmart vs. Evolution Mining Limited | Walmart vs. Gol Intelligent Airlines | Walmart vs. JAPAN AIRLINES |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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