Correlation Between Aegean Airlines and Atlas Copco
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Atlas Copco 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 Atlas Copco 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 Atlas Copco A, you can compare the effects of market volatilities on Aegean Airlines and Atlas Copco 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 Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Atlas Copco.
Diversification Opportunities for Aegean Airlines and Atlas Copco
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aegean and Atlas is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Atlas Copco A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Copco A 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 Atlas Copco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Copco A has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Atlas Copco go up and down completely randomly.
Pair Corralation between Aegean Airlines and Atlas Copco
Assuming the 90 days horizon Aegean Airlines is expected to generate 1.11 times less return on investment than Atlas Copco. But when comparing it to its historical volatility, Aegean Airlines SA is 1.65 times less risky than Atlas Copco. It trades about 0.2 of its potential returns per unit of risk. Atlas Copco A is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,460 in Atlas Copco A on November 3, 2024 and sell it today you would earn a total of 130.00 from holding Atlas Copco A or generate 8.9% 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. Atlas Copco A
Performance |
| Timeline |
| Aegean Airlines SA |
| Atlas Copco A |
Aegean Airlines and Atlas Copco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Atlas Copco
The main advantage of trading using opposite Aegean Airlines and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Atlas Copco 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 Atlas Copco will offset losses from the drop in Atlas Copco's long position.| Aegean Airlines vs. NORWEGIAN AIR SHUT | Aegean Airlines vs. Alaska Air Group | Aegean Airlines vs. Southwest Airlines Co | Aegean Airlines vs. American Airlines Group |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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