Correlation Between Aegean Airlines and Clearside Biomedical
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Clearside Biomedical 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 Clearside Biomedical 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 Clearside Biomedical, you can compare the effects of market volatilities on Aegean Airlines and Clearside Biomedical 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 Clearside Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Clearside Biomedical.
Diversification Opportunities for Aegean Airlines and Clearside Biomedical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aegean and Clearside is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Clearside Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearside Biomedical 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 Clearside Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearside Biomedical has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Clearside Biomedical go up and down completely randomly.
Pair Corralation between Aegean Airlines and Clearside Biomedical
Assuming the 90 days horizon Aegean Airlines SA is expected to generate 0.54 times more return on investment than Clearside Biomedical. However, Aegean Airlines SA is 1.85 times less risky than Clearside Biomedical. It trades about 0.07 of its potential returns per unit of risk. Clearside Biomedical is currently generating about 0.02 per unit of risk. If you would invest 506.00 in Aegean Airlines SA on September 19, 2024 and sell it today you would earn a total of 511.00 from holding Aegean Airlines SA or generate 100.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aegean Airlines SA vs. Clearside Biomedical
Performance |
| Timeline |
| Aegean Airlines SA |
| Clearside Biomedical |
Aegean Airlines and Clearside Biomedical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Clearside Biomedical
The main advantage of trading using opposite Aegean Airlines and Clearside Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Clearside Biomedical 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 Clearside Biomedical will offset losses from the drop in Clearside Biomedical's long position.| Aegean Airlines vs. RYANAIR HLDGS ADR | Aegean Airlines vs. Superior Plus Corp | Aegean Airlines vs. SIVERS SEMICONDUCTORS AB | Aegean Airlines vs. Norsk Hydro ASA |
| Clearside Biomedical vs. Aegean Airlines SA | Clearside Biomedical vs. NURAN WIRELESS INC | Clearside Biomedical vs. American Airlines Group | Clearside Biomedical vs. AAC TECHNOLOGHLDGADR |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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