Correlation Between Aegean Airlines and CLEAN ENERGY
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and CLEAN ENERGY 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 CLEAN ENERGY 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 CLEAN ENERGY FUELS, you can compare the effects of market volatilities on Aegean Airlines and CLEAN ENERGY 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 CLEAN ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and CLEAN ENERGY.
Diversification Opportunities for Aegean Airlines and CLEAN ENERGY
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aegean and CLEAN is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and CLEAN ENERGY FUELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLEAN ENERGY FUELS 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 CLEAN ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLEAN ENERGY FUELS has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and CLEAN ENERGY go up and down completely randomly.
Pair Corralation between Aegean Airlines and CLEAN ENERGY
Assuming the 90 days horizon Aegean Airlines SA is expected to generate 0.67 times more return on investment than CLEAN ENERGY. However, Aegean Airlines SA is 1.49 times less risky than CLEAN ENERGY. It trades about 0.05 of its potential returns per unit of risk. CLEAN ENERGY FUELS is currently generating about -0.01 per unit of risk. If you would invest 684.00 in Aegean Airlines SA on November 9, 2024 and sell it today you would earn a total of 337.00 from holding Aegean Airlines SA or generate 49.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. CLEAN ENERGY FUELS
Performance |
| Timeline |
| Aegean Airlines SA |
| CLEAN ENERGY FUELS |
Aegean Airlines and CLEAN ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and CLEAN ENERGY
The main advantage of trading using opposite Aegean Airlines and CLEAN ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, CLEAN ENERGY 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 CLEAN ENERGY will offset losses from the drop in CLEAN ENERGY's long position.| Aegean Airlines vs. Prosiebensat 1 Media | Aegean Airlines vs. Japan Tobacco | Aegean Airlines vs. Tradegate AG Wertpapierhandelsbank | Aegean Airlines vs. IMPERIAL TOBACCO |
| CLEAN ENERGY vs. CHINA SOUTHN AIR H | CLEAN ENERGY vs. SEALED AIR | CLEAN ENERGY vs. RYANAIR HLDGS ADR | CLEAN ENERGY vs. Grupo Carso SAB |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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