Correlation Between Aegean Airlines and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Dairy Farm 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 Dairy Farm 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 Dairy Farm International, you can compare the effects of market volatilities on Aegean Airlines and Dairy Farm 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 Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Dairy Farm.
Diversification Opportunities for Aegean Airlines and Dairy Farm
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aegean and Dairy is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International 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 Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Dairy Farm go up and down completely randomly.
Pair Corralation between Aegean Airlines and Dairy Farm
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Dairy Farm. But the stock apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 1.05 times less risky than Dairy Farm. The stock trades about -0.29 of its potential returns per unit of risk. The Dairy Farm International is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 204.00 in Dairy Farm International on August 24, 2024 and sell it today you would earn a total of 30.00 from holding Dairy Farm International or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. Dairy Farm International
Performance |
| Timeline |
| Aegean Airlines SA |
| Dairy Farm International |
Aegean Airlines and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Dairy Farm
The main advantage of trading using opposite Aegean Airlines and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| Aegean Airlines vs. RYANAIR HLDGS ADR | Aegean Airlines vs. Southwest Airlines Co | Aegean Airlines vs. China Southern Airlines | Aegean Airlines vs. Ryanair Holdings plc |
| Dairy Farm vs. PT Global Mediacom | Dairy Farm vs. Dave Busters Entertainment | Dairy Farm vs. Ameriprise Financial | Dairy Farm vs. ATRESMEDIA |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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