Correlation Between Aegean Airlines and RenaissanceRe Holdings
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and RenaissanceRe Holdings 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 RenaissanceRe Holdings 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 RenaissanceRe Holdings, you can compare the effects of market volatilities on Aegean Airlines and RenaissanceRe Holdings 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 RenaissanceRe Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and RenaissanceRe Holdings.
Diversification Opportunities for Aegean Airlines and RenaissanceRe Holdings
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aegean and RenaissanceRe is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and RenaissanceRe Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RenaissanceRe Holdings 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 RenaissanceRe Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RenaissanceRe Holdings has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and RenaissanceRe Holdings go up and down completely randomly.
Pair Corralation between Aegean Airlines and RenaissanceRe Holdings
Assuming the 90 days horizon Aegean Airlines SA is expected to generate 0.57 times more return on investment than RenaissanceRe Holdings. However, Aegean Airlines SA is 1.74 times less risky than RenaissanceRe Holdings. It trades about 0.2 of its potential returns per unit of risk. RenaissanceRe Holdings is currently generating about -0.24 per unit of risk. If you would invest 1,005 in Aegean Airlines SA on October 11, 2024 and sell it today you would earn a total of 37.00 from holding Aegean Airlines SA or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. RenaissanceRe Holdings
Performance |
| Timeline |
| Aegean Airlines SA |
| RenaissanceRe Holdings |
Aegean Airlines and RenaissanceRe Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and RenaissanceRe Holdings
The main advantage of trading using opposite Aegean Airlines and RenaissanceRe Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, RenaissanceRe Holdings 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 RenaissanceRe Holdings will offset losses from the drop in RenaissanceRe Holdings' long position.| Aegean Airlines vs. Playtech plc | Aegean Airlines vs. G8 EDUCATION | Aegean Airlines vs. Laureate Education | Aegean Airlines vs. Playmates Toys Limited |
| RenaissanceRe Holdings vs. OPKO HEALTH | RenaissanceRe Holdings vs. Cardinal Health | RenaissanceRe Holdings vs. Aegean Airlines SA | RenaissanceRe Holdings vs. YOOMA WELLNESS INC |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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