Correlation Between Aegean Airlines and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO , you can compare the effects of market volatilities on Aegean Airlines and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and IMPERIAL TOBACCO.
Diversification Opportunities for Aegean Airlines and IMPERIAL TOBACCO
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aegean and IMPERIAL is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between Aegean Airlines and IMPERIAL TOBACCO
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the IMPERIAL TOBACCO. In addition to that, Aegean Airlines is 1.66 times more volatile than IMPERIAL TOBACCO . It trades about -0.03 of its total potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.3 per unit of volatility. If you would invest 2,711 in IMPERIAL TOBACCO on September 19, 2024 and sell it today you would earn a total of 386.00 from holding IMPERIAL TOBACCO or generate 14.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. IMPERIAL TOBACCO
Performance |
| Timeline |
| Aegean Airlines SA |
| IMPERIAL TOBACCO |
Aegean Airlines and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and IMPERIAL TOBACCO
The main advantage of trading using opposite Aegean Airlines and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO'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 |
| IMPERIAL TOBACCO vs. Evolution Mining Limited | IMPERIAL TOBACCO vs. Harmony Gold Mining | IMPERIAL TOBACCO vs. ADRIATIC METALS LS 013355 | IMPERIAL TOBACCO vs. Aegean Airlines SA |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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