Correlation Between Aegean Airlines and Poste Italiane
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Poste Italiane 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 Poste Italiane 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 Poste Italiane SpA, you can compare the effects of market volatilities on Aegean Airlines and Poste Italiane 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 Poste Italiane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Poste Italiane.
Diversification Opportunities for Aegean Airlines and Poste Italiane
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aegean and Poste is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Poste Italiane SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poste Italiane SpA 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 Poste Italiane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poste Italiane SpA has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Poste Italiane go up and down completely randomly.
Pair Corralation between Aegean Airlines and Poste Italiane
Assuming the 90 days horizon Aegean Airlines SA is expected to generate 2.08 times more return on investment than Poste Italiane. However, Aegean Airlines is 2.08 times more volatile than Poste Italiane SpA. It trades about 0.05 of its potential returns per unit of risk. Poste Italiane SpA is currently generating about 0.09 per unit of risk. If you would invest 600.00 in Aegean Airlines SA on October 25, 2024 and sell it today you would earn a total of 394.00 from holding Aegean Airlines SA or generate 65.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aegean Airlines SA vs. Poste Italiane SpA
Performance |
Timeline |
Aegean Airlines SA |
Poste Italiane SpA |
Aegean Airlines and Poste Italiane Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aegean Airlines and Poste Italiane
The main advantage of trading using opposite Aegean Airlines and Poste Italiane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Poste Italiane 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 Poste Italiane will offset losses from the drop in Poste Italiane's long position.Aegean Airlines vs. Meiko Electronics Co | Aegean Airlines vs. LPKF Laser Electronics | Aegean Airlines vs. ELECTRONIC ARTS | Aegean Airlines vs. AOI Electronics Co |
Poste Italiane vs. Synchrony Financial | Poste Italiane vs. Virtu Financial | Poste Italiane vs. SBI Insurance Group | Poste Italiane vs. PDS Biotechnology Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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