Correlation Between Aegean Airlines and DEUTSCHE WOHNEN
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN ADRS12, you can compare the effects of market volatilities on Aegean Airlines and DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and DEUTSCHE WOHNEN.
Diversification Opportunities for Aegean Airlines and DEUTSCHE WOHNEN
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aegean and DEUTSCHE is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and DEUTSCHE WOHNEN ADRS12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE WOHNEN ADRS12 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 DEUTSCHE WOHNEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE WOHNEN ADRS12 has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and DEUTSCHE WOHNEN go up and down completely randomly.
Pair Corralation between Aegean Airlines and DEUTSCHE WOHNEN
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the DEUTSCHE WOHNEN. But the stock apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 1.38 times less risky than DEUTSCHE WOHNEN. The stock trades about 0.0 of its potential returns per unit of risk. The DEUTSCHE WOHNEN ADRS12 is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,140 in DEUTSCHE WOHNEN ADRS12 on September 26, 2024 and sell it today you would lose (10.00) from holding DEUTSCHE WOHNEN ADRS12 or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. DEUTSCHE WOHNEN ADRS12
Performance |
| Timeline |
| Aegean Airlines SA |
| DEUTSCHE WOHNEN ADRS12 |
Aegean Airlines and DEUTSCHE WOHNEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and DEUTSCHE WOHNEN
The main advantage of trading using opposite Aegean Airlines and DEUTSCHE WOHNEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN will offset losses from the drop in DEUTSCHE WOHNEN'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 |
| DEUTSCHE WOHNEN vs. Host Hotels Resorts | DEUTSCHE WOHNEN vs. Aegean Airlines SA | DEUTSCHE WOHNEN vs. Sunstone Hotel Investors | DEUTSCHE WOHNEN vs. Meli Hotels International |
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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