Correlation Between Aegean Airlines and Insurance Australia
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Insurance Australia 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 Insurance Australia 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 Insurance Australia Group, you can compare the effects of market volatilities on Aegean Airlines and Insurance Australia 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 Insurance Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Insurance Australia.
Diversification Opportunities for Aegean Airlines and Insurance Australia
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aegean and Insurance is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Insurance Australia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insurance Australia 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 Insurance Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insurance Australia has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Insurance Australia go up and down completely randomly.
Pair Corralation between Aegean Airlines and Insurance Australia
Assuming the 90 days horizon Aegean Airlines is expected to generate 1.46 times less return on investment than Insurance Australia. In addition to that, Aegean Airlines is 1.53 times more volatile than Insurance Australia Group. It trades about 0.11 of its total potential returns per unit of risk. Insurance Australia Group is currently generating about 0.25 per unit of volatility. If you would invest 505.00 in Insurance Australia Group on November 5, 2024 and sell it today you would earn a total of 35.00 from holding Insurance Australia Group or generate 6.93% 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. Insurance Australia Group
Performance |
| Timeline |
| Aegean Airlines SA |
| Insurance Australia |
Aegean Airlines and Insurance Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Insurance Australia
The main advantage of trading using opposite Aegean Airlines and Insurance Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Insurance Australia 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 Insurance Australia will offset losses from the drop in Insurance Australia's long position.| Aegean Airlines vs. Aya Gold Silver | Aegean Airlines vs. Yanzhou Coal Mining | Aegean Airlines vs. STRAYER EDUCATION | Aegean Airlines vs. ANGLO ASIAN MINING |
| Insurance Australia vs. Fortescue Metals Group | Insurance Australia vs. SBM OFFSHORE | Insurance Australia vs. Jacquet Metal Service | Insurance Australia vs. Transport International Holdings |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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