Correlation Between Aegean Airlines and KENNAMETAL INC
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and KENNAMETAL INC 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 KENNAMETAL INC 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 KENNAMETAL INC, you can compare the effects of market volatilities on Aegean Airlines and KENNAMETAL INC 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 KENNAMETAL INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and KENNAMETAL INC.
Diversification Opportunities for Aegean Airlines and KENNAMETAL INC
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aegean and KENNAMETAL is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and KENNAMETAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENNAMETAL INC 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 KENNAMETAL INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENNAMETAL INC has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and KENNAMETAL INC go up and down completely randomly.
Pair Corralation between Aegean Airlines and KENNAMETAL INC
Assuming the 90 days horizon Aegean Airlines is expected to generate 1.23 times less return on investment than KENNAMETAL INC. But when comparing it to its historical volatility, Aegean Airlines SA is 1.65 times less risky than KENNAMETAL INC. It trades about 0.04 of its potential returns per unit of risk. KENNAMETAL INC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,303 in KENNAMETAL INC on October 14, 2024 and sell it today you would earn a total of 57.00 from holding KENNAMETAL INC or generate 2.48% 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. KENNAMETAL INC
Performance |
| Timeline |
| Aegean Airlines SA |
| KENNAMETAL INC |
Aegean Airlines and KENNAMETAL INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and KENNAMETAL INC
The main advantage of trading using opposite Aegean Airlines and KENNAMETAL INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, KENNAMETAL INC 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 KENNAMETAL INC will offset losses from the drop in KENNAMETAL INC's long position.| Aegean Airlines vs. Harmony Gold Mining | Aegean Airlines vs. SAN MIGUEL BREWERY | Aegean Airlines vs. COPLAND ROAD CAPITAL | Aegean Airlines vs. BROADWIND ENRGY |
| KENNAMETAL INC vs. Quaker Chemical | KENNAMETAL INC vs. Aegean Airlines SA | KENNAMETAL INC vs. Nok Airlines PCL | KENNAMETAL INC vs. X FAB Silicon Foundries |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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