Correlation Between Teradata Corp and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both Teradata Corp and AEGEAN AIRLINES 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 Teradata Corp and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradata Corp and AEGEAN AIRLINES, you can compare the effects of market volatilities on Teradata Corp and AEGEAN AIRLINES 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 Teradata Corp with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradata Corp and AEGEAN AIRLINES.
Diversification Opportunities for Teradata Corp and AEGEAN AIRLINES
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Teradata and AEGEAN is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Teradata Corp and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and Teradata Corp 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 Teradata Corp are associated (or correlated) with AEGEAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEGEAN AIRLINES has no effect on the direction of Teradata Corp i.e., Teradata Corp and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between Teradata Corp and AEGEAN AIRLINES
Assuming the 90 days horizon Teradata Corp is expected to generate 1.3 times more return on investment than AEGEAN AIRLINES. However, Teradata Corp is 1.3 times more volatile than AEGEAN AIRLINES. It trades about -0.01 of its potential returns per unit of risk. AEGEAN AIRLINES is currently generating about -0.02 per unit of risk. If you would invest 3,220 in Teradata Corp on October 30, 2024 and sell it today you would lose (160.00) from holding Teradata Corp or give up 4.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teradata Corp vs. AEGEAN AIRLINES
Performance |
| Timeline |
| Teradata Corp |
| AEGEAN AIRLINES |
Teradata Corp and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradata Corp and AEGEAN AIRLINES
The main advantage of trading using opposite Teradata Corp and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradata Corp position performs unexpectedly, AEGEAN AIRLINES 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 AEGEAN AIRLINES will offset losses from the drop in AEGEAN AIRLINES's long position.| Teradata Corp vs. InPlay Oil Corp | Teradata Corp vs. BOS BETTER ONLINE | Teradata Corp vs. Gaming and Leisure | Teradata Corp vs. ARISTOCRAT LEISURE |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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