Correlation Between PETCO HEALTH and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both PETCO HEALTH 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 PETCO HEALTH and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PETCO HEALTH CLA and AEGEAN AIRLINES, you can compare the effects of market volatilities on PETCO HEALTH 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 PETCO HEALTH with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PETCO HEALTH and AEGEAN AIRLINES.
Diversification Opportunities for PETCO HEALTH and AEGEAN AIRLINES
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PETCO and AEGEAN is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding PETCO HEALTH CLA and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and PETCO HEALTH 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 PETCO HEALTH CLA 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 PETCO HEALTH i.e., PETCO HEALTH and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between PETCO HEALTH and AEGEAN AIRLINES
Assuming the 90 days horizon PETCO HEALTH CLA is expected to generate 3.88 times more return on investment than AEGEAN AIRLINES. However, PETCO HEALTH is 3.88 times more volatile than AEGEAN AIRLINES. It trades about 0.15 of its potential returns per unit of risk. AEGEAN AIRLINES is currently generating about -0.12 per unit of risk. If you would invest 389.00 in PETCO HEALTH CLA on September 4, 2024 and sell it today you would earn a total of 72.00 from holding PETCO HEALTH CLA or generate 18.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PETCO HEALTH CLA vs. AEGEAN AIRLINES
Performance |
| Timeline |
| PETCO HEALTH CLA |
| AEGEAN AIRLINES |
PETCO HEALTH and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PETCO HEALTH and AEGEAN AIRLINES
The main advantage of trading using opposite PETCO HEALTH and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PETCO HEALTH 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.| PETCO HEALTH vs. CHIBA BANK | PETCO HEALTH vs. Goodyear Tire Rubber | PETCO HEALTH vs. Webster Financial | PETCO HEALTH vs. Chiba Bank |
| AEGEAN AIRLINES vs. TOTAL GABON | AEGEAN AIRLINES vs. Walgreens Boots Alliance | AEGEAN AIRLINES vs. Peak Resources Limited |
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 CEOs Directory module to screen CEOs from public companies around the world.
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