Correlation Between Aegean Airlines and EMBARK EDUCATION
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and EMBARK EDUCATION 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 EMBARK EDUCATION 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 EMBARK EDUCATION LTD, you can compare the effects of market volatilities on Aegean Airlines and EMBARK EDUCATION 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 EMBARK EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and EMBARK EDUCATION.
Diversification Opportunities for Aegean Airlines and EMBARK EDUCATION
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aegean and EMBARK is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and EMBARK EDUCATION LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMBARK EDUCATION LTD 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 EMBARK EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMBARK EDUCATION LTD has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and EMBARK EDUCATION go up and down completely randomly.
Pair Corralation between Aegean Airlines and EMBARK EDUCATION
Assuming the 90 days horizon Aegean Airlines is expected to generate 1.04 times less return on investment than EMBARK EDUCATION. In addition to that, Aegean Airlines is 2.65 times more volatile than EMBARK EDUCATION LTD. It trades about 0.08 of its total potential returns per unit of risk. EMBARK EDUCATION LTD is currently generating about 0.22 per unit of volatility. If you would invest 30.00 in EMBARK EDUCATION LTD on September 14, 2024 and sell it today you would earn a total of 1.00 from holding EMBARK EDUCATION LTD or generate 3.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Aegean Airlines SA vs. EMBARK EDUCATION LTD
Performance |
Timeline |
Aegean Airlines SA |
EMBARK EDUCATION LTD |
Aegean Airlines and EMBARK EDUCATION Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aegean Airlines and EMBARK EDUCATION
The main advantage of trading using opposite Aegean Airlines and EMBARK EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, EMBARK EDUCATION 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 EMBARK EDUCATION will offset losses from the drop in EMBARK EDUCATION'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 |
EMBARK EDUCATION vs. IDP EDUCATION LTD | EMBARK EDUCATION vs. Strategic Education | EMBARK EDUCATION vs. Laureate Education | EMBARK EDUCATION vs. Superior Plus 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Commodity Directory Find actively traded commodities issued by global exchanges |