Correlation Between Aegean Airlines and HANOVER INSURANCE
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and HANOVER INSURANCE 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 HANOVER INSURANCE 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 HANOVER INSURANCE, you can compare the effects of market volatilities on Aegean Airlines and HANOVER INSURANCE 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 HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and HANOVER INSURANCE.
Diversification Opportunities for Aegean Airlines and HANOVER INSURANCE
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aegean and HANOVER is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE 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 HANOVER INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANOVER INSURANCE has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and HANOVER INSURANCE go up and down completely randomly.
Pair Corralation between Aegean Airlines and HANOVER INSURANCE
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the HANOVER INSURANCE. In addition to that, Aegean Airlines is 1.62 times more volatile than HANOVER INSURANCE. It trades about -0.01 of its total potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.09 per unit of volatility. If you would invest 9,773 in HANOVER INSURANCE on September 23, 2024 and sell it today you would earn a total of 4,827 from holding HANOVER INSURANCE or generate 49.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. HANOVER INSURANCE
Performance |
| Timeline |
| Aegean Airlines SA |
| HANOVER INSURANCE |
Aegean Airlines and HANOVER INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and HANOVER INSURANCE
The main advantage of trading using opposite Aegean Airlines and HANOVER INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, HANOVER INSURANCE 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 HANOVER INSURANCE will offset losses from the drop in HANOVER INSURANCE's long position.| Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. Air China Limited | Aegean Airlines vs. AIR CHINA LTD | Aegean Airlines vs. RYANAIR HLDGS ADR |
| HANOVER INSURANCE vs. Aluminum of | HANOVER INSURANCE vs. Singapore Telecommunications Limited | HANOVER INSURANCE vs. QURATE RETAIL INC | HANOVER INSURANCE vs. Ross Stores |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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