Correlation Between Aegean Airlines and TAL Education
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and TAL Education 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 TAL Education 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 TAL Education Group, you can compare the effects of market volatilities on Aegean Airlines and TAL Education 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 TAL Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and TAL Education.
Diversification Opportunities for Aegean Airlines and TAL Education
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aegean and TAL is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and TAL Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAL Education Group 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 TAL Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAL Education Group has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and TAL Education go up and down completely randomly.
Pair Corralation between Aegean Airlines and TAL Education
Assuming the 90 days horizon Aegean Airlines SA is expected to generate 0.55 times more return on investment than TAL Education. However, Aegean Airlines SA is 1.82 times less risky than TAL Education. It trades about -0.01 of its potential returns per unit of risk. TAL Education Group is currently generating about -0.36 per unit of risk. If you would invest 1,146 in Aegean Airlines SA on January 14, 2025 and sell it today you would lose (14.00) from holding Aegean Airlines SA or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. TAL Education Group
Performance |
| Timeline |
| Aegean Airlines SA |
| TAL Education Group |
Aegean Airlines and TAL Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and TAL Education
The main advantage of trading using opposite Aegean Airlines and TAL Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, TAL Education 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 TAL Education will offset losses from the drop in TAL Education's long position.| Aegean Airlines vs. MPH Health Care | Aegean Airlines vs. American Eagle Outfitters | Aegean Airlines vs. National Health Investors | Aegean Airlines vs. Allegheny Technologies Incorporated |
| TAL Education vs. ORMAT TECHNOLOGIES | TAL Education vs. Digilife Technologies Limited | TAL Education vs. Sabre Insurance Group | TAL Education vs. Easy Software AG |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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