Correlation Between VIRG NATL and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both VIRG NATL 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 VIRG NATL and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIRG NATL BANKSH and AEGEAN AIRLINES, you can compare the effects of market volatilities on VIRG NATL 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 VIRG NATL with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIRG NATL and AEGEAN AIRLINES.
Diversification Opportunities for VIRG NATL and AEGEAN AIRLINES
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VIRG and AEGEAN is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding VIRG NATL BANKSH and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and VIRG NATL 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 VIRG NATL BANKSH 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 VIRG NATL i.e., VIRG NATL and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between VIRG NATL and AEGEAN AIRLINES
Assuming the 90 days horizon VIRG NATL BANKSH is expected to generate 1.85 times more return on investment than AEGEAN AIRLINES. However, VIRG NATL is 1.85 times more volatile than AEGEAN AIRLINES. It trades about 0.13 of its potential returns per unit of risk. AEGEAN AIRLINES is currently generating about -0.16 per unit of risk. If you would invest 3,309 in VIRG NATL BANKSH on August 28, 2024 and sell it today you would earn a total of 671.00 from holding VIRG NATL BANKSH or generate 20.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
VIRG NATL BANKSH vs. AEGEAN AIRLINES
Performance |
| Timeline |
| VIRG NATL BANKSH |
| AEGEAN AIRLINES |
VIRG NATL and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIRG NATL and AEGEAN AIRLINES
The main advantage of trading using opposite VIRG NATL and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIRG NATL 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.| VIRG NATL vs. Perseus Mining Limited | VIRG NATL vs. Calibre Mining Corp | VIRG NATL vs. Dairy Farm International | VIRG NATL vs. ScanSource |
| AEGEAN AIRLINES vs. COMBA TELECOM SYST | AEGEAN AIRLINES vs. Rogers Communications | AEGEAN AIRLINES vs. INTERSHOP Communications Aktiengesellschaft | AEGEAN AIRLINES vs. China Communications Services |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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