Correlation Between Poste Italiane and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Poste Italiane 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 Poste Italiane and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Poste Italiane SpA and Aegean Airlines SA, you can compare the effects of market volatilities on Poste Italiane 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 Poste Italiane with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poste Italiane and Aegean Airlines.
Diversification Opportunities for Poste Italiane and Aegean Airlines
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Poste and Aegean is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Poste Italiane SpA and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA and Poste Italiane 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 Poste Italiane SpA 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 SA has no effect on the direction of Poste Italiane i.e., Poste Italiane and Aegean Airlines go up and down completely randomly.
Pair Corralation between Poste Italiane and Aegean Airlines
Assuming the 90 days horizon Poste Italiane SpA is expected to generate 0.41 times more return on investment than Aegean Airlines. However, Poste Italiane SpA is 2.46 times less risky than Aegean Airlines. It trades about 0.58 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.02 per unit of risk. If you would invest 1,353 in Poste Italiane SpA on October 25, 2024 and sell it today you would earn a total of 83.00 from holding Poste Italiane SpA or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Poste Italiane SpA vs. Aegean Airlines SA
Performance |
| Timeline |
| Poste Italiane SpA |
| Aegean Airlines SA |
Poste Italiane and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poste Italiane and Aegean Airlines
The main advantage of trading using opposite Poste Italiane and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poste Italiane 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' long position.| Poste Italiane vs. Synchrony Financial | Poste Italiane vs. Virtu Financial | Poste Italiane vs. SBI Insurance Group | Poste Italiane vs. PDS Biotechnology Corp |
| Aegean Airlines vs. Meiko Electronics Co | Aegean Airlines vs. LPKF Laser Electronics | Aegean Airlines vs. ELECTRONIC ARTS | Aegean Airlines vs. AOI Electronics Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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