Correlation Between Aegean Airlines and Makita
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Makita 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 Makita 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 Makita, you can compare the effects of market volatilities on Aegean Airlines and Makita 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 Makita. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Makita.
Diversification Opportunities for Aegean Airlines and Makita
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aegean and Makita is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Makita in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makita 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 Makita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makita has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Makita go up and down completely randomly.
Pair Corralation between Aegean Airlines and Makita
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Makita. But the stock apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 1.27 times less risky than Makita. The stock trades about -0.02 of its potential returns per unit of risk. The Makita is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,415 in Makita on September 2, 2024 and sell it today you would earn a total of 509.00 from holding Makita or generate 21.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. Makita
Performance |
| Timeline |
| Aegean Airlines SA |
| Makita |
Aegean Airlines and Makita Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Makita
The main advantage of trading using opposite Aegean Airlines and Makita positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Makita 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 Makita will offset losses from the drop in Makita's long position.| Aegean Airlines vs. Superior Plus Corp | Aegean Airlines vs. NMI Holdings | Aegean Airlines vs. Origin Agritech | Aegean Airlines vs. SIVERS SEMICONDUCTORS AB |
| Makita vs. MTI WIRELESS EDGE | Makita vs. Sumitomo Mitsui Construction | Makita vs. North American Construction | Makita vs. CENTURIA OFFICE REIT |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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