Correlation Between Aegean Airlines and Chunghwa Telecom
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Chunghwa Telecom 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 Chunghwa Telecom 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 Chunghwa Telecom Co, you can compare the effects of market volatilities on Aegean Airlines and Chunghwa Telecom 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 Chunghwa Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Chunghwa Telecom.
Diversification Opportunities for Aegean Airlines and Chunghwa Telecom
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aegean and Chunghwa is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Chunghwa Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chunghwa Telecom 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 Chunghwa Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chunghwa Telecom has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Chunghwa Telecom go up and down completely randomly.
Pair Corralation between Aegean Airlines and Chunghwa Telecom
Assuming the 90 days horizon Aegean Airlines SA is expected to generate 2.74 times more return on investment than Chunghwa Telecom. However, Aegean Airlines is 2.74 times more volatile than Chunghwa Telecom Co. It trades about 0.07 of its potential returns per unit of risk. Chunghwa Telecom Co is currently generating about 0.03 per unit of risk. If you would invest 550.00 in Aegean Airlines SA on October 12, 2024 and sell it today you would earn a total of 492.00 from holding Aegean Airlines SA or generate 89.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. Chunghwa Telecom Co
Performance |
| Timeline |
| Aegean Airlines SA |
| Chunghwa Telecom |
Aegean Airlines and Chunghwa Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Chunghwa Telecom
The main advantage of trading using opposite Aegean Airlines and Chunghwa Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Chunghwa Telecom 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 Chunghwa Telecom will offset losses from the drop in Chunghwa Telecom's long position.| Aegean Airlines vs. Bio Techne Corp | Aegean Airlines vs. T MOBILE US | Aegean Airlines vs. Entravision Communications | Aegean Airlines vs. SOCKET MOBILE NEW |
| Chunghwa Telecom vs. CHINA SOUTHN AIR H | Chunghwa Telecom vs. ALTAIR RES INC | Chunghwa Telecom vs. SALESFORCE INC CDR | Chunghwa Telecom vs. Corsair Gaming |
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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