Correlation Between AEGEAN AIRLINES and CHINA SOUTHN
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and CHINA SOUTHN 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 CHINA SOUTHN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and CHINA SOUTHN AIR H , you can compare the effects of market volatilities on AEGEAN AIRLINES and CHINA SOUTHN 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 CHINA SOUTHN. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and CHINA SOUTHN.
Diversification Opportunities for AEGEAN AIRLINES and CHINA SOUTHN
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AEGEAN and CHINA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and CHINA SOUTHN AIR H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA SOUTHN AIR 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 CHINA SOUTHN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA SOUTHN AIR has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and CHINA SOUTHN go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and CHINA SOUTHN
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 0.65 times more return on investment than CHINA SOUTHN. However, AEGEAN AIRLINES is 1.55 times less risky than CHINA SOUTHN. It trades about 0.08 of its potential returns per unit of risk. CHINA SOUTHN AIR H is currently generating about -0.01 per unit of risk. If you would invest 536.00 in AEGEAN AIRLINES on October 11, 2024 and sell it today you would earn a total of 495.00 from holding AEGEAN AIRLINES or generate 92.35% 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. CHINA SOUTHN AIR H
Performance |
Timeline |
AEGEAN AIRLINES |
CHINA SOUTHN AIR |
AEGEAN AIRLINES and CHINA SOUTHN Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AEGEAN AIRLINES and CHINA SOUTHN
The main advantage of trading using opposite AEGEAN AIRLINES and CHINA SOUTHN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, CHINA SOUTHN 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 CHINA SOUTHN will offset losses from the drop in CHINA SOUTHN's long position.AEGEAN AIRLINES vs. TERADATA | AEGEAN AIRLINES vs. Automatic Data Processing | AEGEAN AIRLINES vs. Q2M Managementberatung AG | AEGEAN AIRLINES vs. MICRONIC MYDATA |
CHINA SOUTHN vs. American Airlines Group | CHINA SOUTHN vs. Fukuyama Transporting Co | CHINA SOUTHN vs. NTG Nordic Transport | CHINA SOUTHN 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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