Correlation Between AEGEAN AIRLINES and CarsalesCom
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and CarsalesCom 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 CarsalesCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and CarsalesCom, you can compare the effects of market volatilities on AEGEAN AIRLINES and CarsalesCom 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 CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and CarsalesCom.
Diversification Opportunities for AEGEAN AIRLINES and CarsalesCom
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AEGEAN and CarsalesCom is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and CarsalesCom go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and CarsalesCom
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to under-perform the CarsalesCom. In addition to that, AEGEAN AIRLINES is 1.27 times more volatile than CarsalesCom. It trades about -0.09 of its total potential returns per unit of risk. CarsalesCom is currently generating about 0.54 per unit of volatility. If you would invest 2,200 in CarsalesCom on September 2, 2024 and sell it today you would earn a total of 340.00 from holding CarsalesCom or generate 15.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. CarsalesCom
Performance |
| Timeline |
| AEGEAN AIRLINES |
| CarsalesCom |
AEGEAN AIRLINES and CarsalesCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and CarsalesCom
The main advantage of trading using opposite AEGEAN AIRLINES and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom'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 |
| CarsalesCom vs. URBAN OUTFITTERS | CarsalesCom vs. AM EAGLE OUTFITTERS | CarsalesCom vs. ADRIATIC METALS LS 013355 | CarsalesCom vs. MEDICAL FACILITIES NEW |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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