Correlation Between Pure Storage and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both Pure Storage 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 Pure Storage and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pure Storage and AEGEAN AIRLINES, you can compare the effects of market volatilities on Pure Storage 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 Pure Storage with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Storage and AEGEAN AIRLINES.
Diversification Opportunities for Pure Storage and AEGEAN AIRLINES
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pure and AEGEAN is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and Pure Storage 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 Pure Storage 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 Pure Storage i.e., Pure Storage and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between Pure Storage and AEGEAN AIRLINES
Assuming the 90 days horizon Pure Storage is expected to generate 1.59 times more return on investment than AEGEAN AIRLINES. However, Pure Storage is 1.59 times more volatile than AEGEAN AIRLINES. It trades about 0.07 of its potential returns per unit of risk. AEGEAN AIRLINES is currently generating about 0.07 per unit of risk. If you would invest 2,467 in Pure Storage on October 16, 2024 and sell it today you would earn a total of 3,648 from holding Pure Storage or generate 147.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Pure Storage vs. AEGEAN AIRLINES
Performance |
| Timeline |
| Pure Storage |
| AEGEAN AIRLINES |
Pure Storage and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pure Storage and AEGEAN AIRLINES
The main advantage of trading using opposite Pure Storage and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Storage 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.| Pure Storage vs. FIRST SHIP LEASE | Pure Storage vs. CHINA TONTINE WINES | Pure Storage vs. LOANDEPOT INC A | Pure Storage vs. ITALIAN WINE BRANDS |
| AEGEAN AIRLINES vs. Teradata Corp | AEGEAN AIRLINES vs. Pure Storage | AEGEAN AIRLINES vs. CN DATANG C | AEGEAN AIRLINES vs. Data Modul AG |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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