Correlation Between Aegean Airlines and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Commonwealth Bank 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 Commonwealth Bank 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 Commonwealth Bank of, you can compare the effects of market volatilities on Aegean Airlines and Commonwealth Bank 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 Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Commonwealth Bank.
Diversification Opportunities for Aegean Airlines and Commonwealth Bank
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aegean and Commonwealth is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank 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 Commonwealth Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Bank has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Aegean Airlines and Commonwealth Bank
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Commonwealth Bank. In addition to that, Aegean Airlines is 1.36 times more volatile than Commonwealth Bank of. It trades about -0.02 of its total potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.14 per unit of volatility. If you would invest 6,144 in Commonwealth Bank of on September 4, 2024 and sell it today you would earn a total of 3,592 from holding Commonwealth Bank of or generate 58.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Aegean Airlines SA vs. Commonwealth Bank of
Performance |
| Timeline |
| Aegean Airlines SA |
| Commonwealth Bank |
Aegean Airlines and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Commonwealth Bank
The main advantage of trading using opposite Aegean Airlines and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Commonwealth Bank 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 Commonwealth Bank will offset losses from the drop in Commonwealth Bank's long position.| Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. AIR CHINA LTD | Aegean Airlines vs. RYANAIR HLDGS ADR | Aegean Airlines vs. Southwest Airlines Co |
| Commonwealth Bank vs. CARSALESCOM | Commonwealth Bank vs. National Retail Properties | Commonwealth Bank vs. BROADWIND ENRGY | Commonwealth Bank vs. Fukuyama Transporting Co |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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