Correlation Between Aegean Airlines and Media
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Media 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 Media 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 Media and Games, you can compare the effects of market volatilities on Aegean Airlines and Media 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 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Media.
Diversification Opportunities for Aegean Airlines and Media
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aegean and Media is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Media go up and down completely randomly.
Pair Corralation between Aegean Airlines and Media
Assuming the 90 days horizon Aegean Airlines is expected to generate 1.24 times less return on investment than Media. But when comparing it to its historical volatility, Aegean Airlines SA is 1.65 times less risky than Media. It trades about 0.07 of its potential returns per unit of risk. Media and Games is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Media and Games on October 11, 2024 and sell it today you would earn a total of 134.00 from holding Media and Games or generate 81.21% 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. Media and Games
Performance |
| Timeline |
| Aegean Airlines SA |
| Media and Games |
Aegean Airlines and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Media
The main advantage of trading using opposite Aegean Airlines and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Media 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 Media will offset losses from the drop in Media's long position.| Aegean Airlines vs. Playtech plc | Aegean Airlines vs. G8 EDUCATION | Aegean Airlines vs. Laureate Education | Aegean Airlines vs. Playmates Toys Limited |
| Media vs. BURLINGTON STORES | Media vs. Cogent Communications Holdings | Media vs. T MOBILE INCDL 00001 | Media vs. Iridium Communications |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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