Correlation Between Aegean Airlines and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and InPlay Oil 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 InPlay Oil 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 InPlay Oil Corp, you can compare the effects of market volatilities on Aegean Airlines and InPlay Oil 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 InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and InPlay Oil.
Diversification Opportunities for Aegean Airlines and InPlay Oil
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aegean and InPlay is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp 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 InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and InPlay Oil go up and down completely randomly.
Pair Corralation between Aegean Airlines and InPlay Oil
Assuming the 90 days horizon Aegean Airlines SA is expected to generate 0.99 times more return on investment than InPlay Oil. However, Aegean Airlines SA is 1.01 times less risky than InPlay Oil. It trades about 0.08 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about -0.07 per unit of risk. If you would invest 962.00 in Aegean Airlines SA on September 14, 2024 and sell it today you would earn a total of 29.00 from holding Aegean Airlines SA or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. InPlay Oil Corp
Performance |
| Timeline |
| Aegean Airlines SA |
| InPlay Oil Corp |
Aegean Airlines and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and InPlay Oil
The main advantage of trading using opposite Aegean Airlines and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, InPlay Oil 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 InPlay Oil will offset losses from the drop in InPlay Oil'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 |
| InPlay Oil vs. BJs Restaurants | InPlay Oil vs. Spirent Communications plc | InPlay Oil vs. KRISPY KREME DL 01 | InPlay Oil vs. AGF Management 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 CEOs Directory module to screen CEOs from public companies around the world.
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