Correlation Between AEGEAN AIRLINES and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and SENECA FOODS-A 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 SENECA FOODS-A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and SENECA FOODS A, you can compare the effects of market volatilities on AEGEAN AIRLINES and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and SENECA FOODS-A.
Diversification Opportunities for AEGEAN AIRLINES and SENECA FOODS-A
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between AEGEAN and SENECA is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and SENECA FOODS-A
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 0.5 times more return on investment than SENECA FOODS-A. However, AEGEAN AIRLINES is 2.0 times less risky than SENECA FOODS-A. It trades about -0.05 of its potential returns per unit of risk. SENECA FOODS A is currently generating about -0.19 per unit of risk. If you would invest 1,018 in AEGEAN AIRLINES on October 17, 2024 and sell it today you would lose (11.00) from holding AEGEAN AIRLINES or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. SENECA FOODS A
Performance |
| Timeline |
| AEGEAN AIRLINES |
| SENECA FOODS A |
AEGEAN AIRLINES and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and SENECA FOODS-A
The main advantage of trading using opposite AEGEAN AIRLINES and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A's long position.| AEGEAN AIRLINES vs. National Retail Properties | AEGEAN AIRLINES vs. FAST RETAIL ADR | AEGEAN AIRLINES vs. Endeavour Mining PLC | AEGEAN AIRLINES vs. Costco Wholesale Corp |
| SENECA FOODS-A vs. PARKEN Sport Entertainment | SENECA FOODS-A vs. Gaztransport Technigaz SA | SENECA FOODS-A vs. BII Railway Transportation | SENECA FOODS-A vs. AEGEAN 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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