Correlation Between Aegean Airlines and Western Copper
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Western Copper 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 Western Copper 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 Western Copper and, you can compare the effects of market volatilities on Aegean Airlines and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Western Copper.
Diversification Opportunities for Aegean Airlines and Western Copper
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aegean and Western is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Western Copper go up and down completely randomly.
Pair Corralation between Aegean Airlines and Western Copper
Assuming the 90 days horizon Aegean Airlines SA is expected to generate 0.8 times more return on investment than Western Copper. However, Aegean Airlines SA is 1.24 times less risky than Western Copper. It trades about 0.07 of its potential returns per unit of risk. Western Copper and is currently generating about -0.02 per unit of risk. If you would invest 493.00 in Aegean Airlines SA on September 13, 2024 and sell it today you would earn a total of 512.00 from holding Aegean Airlines SA or generate 103.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. Western Copper and
Performance |
| Timeline |
| Aegean Airlines SA |
| Western Copper |
Aegean Airlines and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Western Copper
The main advantage of trading using opposite Aegean Airlines and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| Aegean Airlines vs. RYANAIR HLDGS ADR | Aegean Airlines vs. Ryanair Holdings plc | Aegean Airlines vs. Superior Plus Corp | Aegean Airlines vs. SIVERS SEMICONDUCTORS AB |
| Western Copper vs. BHP Group Limited | Western Copper vs. Vale SA | Western Copper vs. Superior Plus Corp | Western Copper vs. SIVERS SEMICONDUCTORS AB |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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