Correlation Between Aegean Airlines and Townsquare Media
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Townsquare Media 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 Townsquare Media 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 Townsquare Media, you can compare the effects of market volatilities on Aegean Airlines and Townsquare Media 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 Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Townsquare Media.
Diversification Opportunities for Aegean Airlines and Townsquare Media
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aegean and Townsquare is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media 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 Townsquare Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Townsquare Media has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Townsquare Media go up and down completely randomly.
Pair Corralation between Aegean Airlines and Townsquare Media
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Townsquare Media. But the stock apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 1.11 times less risky than Townsquare Media. The stock trades about -0.02 of its potential returns per unit of risk. The Townsquare Media is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 949.00 in Townsquare Media on August 26, 2024 and sell it today you would lose (49.00) from holding Townsquare Media or give up 5.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. Townsquare Media
Performance |
| Timeline |
| Aegean Airlines SA |
| Townsquare Media |
Aegean Airlines and Townsquare Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Townsquare Media
The main advantage of trading using opposite Aegean Airlines and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Townsquare Media 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 Townsquare Media will offset losses from the drop in Townsquare Media'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 |
| Townsquare Media vs. GALENA MINING LTD | Townsquare Media vs. CeoTronics AG | Townsquare Media vs. Coor Service Management | Townsquare Media vs. Canadian Utilities Limited |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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