Correlation Between Aegean Airlines and PT Global
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and PT Global 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 PT Global 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 PT Global Mediacom, you can compare the effects of market volatilities on Aegean Airlines and PT Global 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 PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and PT Global.
Diversification Opportunities for Aegean Airlines and PT Global
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aegean and 06L is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom 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 PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and PT Global go up and down completely randomly.
Pair Corralation between Aegean Airlines and PT Global
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the PT Global. But the stock apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 5.56 times less risky than PT Global. The stock trades about -0.02 of its potential returns per unit of risk. The PT Global Mediacom is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1.30 in PT Global Mediacom on August 26, 2024 and sell it today you would lose (0.55) from holding PT Global Mediacom or give up 42.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. PT Global Mediacom
Performance |
| Timeline |
| Aegean Airlines SA |
| PT Global Mediacom |
Aegean Airlines and PT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and PT Global
The main advantage of trading using opposite Aegean Airlines and PT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, PT Global 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 PT Global will offset losses from the drop in PT Global's long position.| Aegean Airlines vs. Sterling Construction | Aegean Airlines vs. Daito Trust Construction | Aegean Airlines vs. Tianjin Capital Environmental | Aegean Airlines vs. Hanison Construction Holdings |
| PT Global vs. The Walt Disney | PT Global vs. Superior Plus Corp | PT Global vs. NMI Holdings | PT Global vs. Origin Agritech |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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