Correlation Between Aegean Airlines and American Financial
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and American Financial 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 American Financial 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 American Financial Group, you can compare the effects of market volatilities on Aegean Airlines and American Financial 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 American Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and American Financial.
Diversification Opportunities for Aegean Airlines and American Financial
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aegean and American is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and American Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Financial 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 American Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Financial has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and American Financial go up and down completely randomly.
Pair Corralation between Aegean Airlines and American Financial
Assuming the 90 days horizon Aegean Airlines is expected to generate 33.59 times less return on investment than American Financial. In addition to that, Aegean Airlines is 1.34 times more volatile than American Financial Group. It trades about 0.0 of its total potential returns per unit of risk. American Financial Group is currently generating about 0.09 per unit of volatility. If you would invest 10,054 in American Financial Group on September 12, 2024 and sell it today you would earn a total of 3,346 from holding American Financial Group or generate 33.28% 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. American Financial Group
Performance |
| Timeline |
| Aegean Airlines SA |
| American Financial |
Aegean Airlines and American Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and American Financial
The main advantage of trading using opposite Aegean Airlines and American Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, American Financial 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 American Financial will offset losses from the drop in American Financial's long position.| Aegean Airlines vs. RYANAIR HLDGS ADR | Aegean Airlines vs. Ryanair Holdings plc | Aegean Airlines vs. Superior Plus Corp | Aegean Airlines vs. SIVERS SEMICONDUCTORS AB |
| American Financial vs. AEGEAN AIRLINES | American Financial vs. International Consolidated Airlines | American Financial vs. Aegean Airlines SA | American Financial vs. SINGAPORE AIRLINES |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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