Correlation Between Aegean Airlines and IDP EDUCATION
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and IDP EDUCATION 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 IDP EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegean Airlines SA and IDP EDUCATION LTD, you can compare the effects of market volatilities on Aegean Airlines and IDP EDUCATION 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 IDP EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and IDP EDUCATION.
Diversification Opportunities for Aegean Airlines and IDP EDUCATION
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aegean and IDP is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and IDP EDUCATION LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDP EDUCATION LTD 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 SA are associated (or correlated) with IDP EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDP EDUCATION LTD has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and IDP EDUCATION go up and down completely randomly.
Pair Corralation between Aegean Airlines and IDP EDUCATION
Assuming the 90 days horizon Aegean Airlines SA is expected to generate 0.79 times more return on investment than IDP EDUCATION. However, Aegean Airlines SA is 1.27 times less risky than IDP EDUCATION. It trades about -0.16 of its potential returns per unit of risk. IDP EDUCATION LTD is currently generating about -0.15 per unit of risk. If you would invest 1,019 in Aegean Airlines SA on August 30, 2024 and sell it today you would lose (67.00) from holding Aegean Airlines SA or give up 6.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. IDP EDUCATION LTD
Performance |
| Timeline |
| Aegean Airlines SA |
| IDP EDUCATION LTD |
Aegean Airlines and IDP EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and IDP EDUCATION
The main advantage of trading using opposite Aegean Airlines and IDP EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, IDP EDUCATION 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 IDP EDUCATION will offset losses from the drop in IDP EDUCATION's long position.| Aegean Airlines vs. Playtech plc | Aegean Airlines vs. COLUMBIA SPORTSWEAR | Aegean Airlines vs. Universal Display | Aegean Airlines vs. Columbia Sportswear |
| IDP EDUCATION vs. Singapore Airlines Limited | IDP EDUCATION vs. SEALED AIR | IDP EDUCATION vs. International Consolidated Airlines | IDP EDUCATION vs. United Airlines Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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