Correlation Between InPlay Oil and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both InPlay Oil 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 InPlay Oil and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InPlay Oil Corp and Aegean Airlines SA, you can compare the effects of market volatilities on InPlay Oil 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 InPlay Oil with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Aegean Airlines.
Diversification Opportunities for InPlay Oil and Aegean Airlines
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InPlay and Aegean is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp 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 InPlay Oil 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 InPlay Oil 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 SA has no effect on the direction of InPlay Oil i.e., InPlay Oil and Aegean Airlines go up and down completely randomly.
Pair Corralation between InPlay Oil and Aegean Airlines
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the Aegean Airlines. But the stock apears to be less risky and, when comparing its historical volatility, InPlay Oil Corp is 1.32 times less risky than Aegean Airlines. The stock trades about -0.29 of its potential returns per unit of risk. The Aegean Airlines SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,022 in Aegean Airlines SA on November 5, 2024 and sell it today you would earn a total of 48.00 from holding Aegean Airlines SA or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. Aegean Airlines SA
Performance |
| Timeline |
| InPlay Oil Corp |
| Aegean Airlines SA |
InPlay Oil and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and Aegean Airlines
The main advantage of trading using opposite InPlay Oil and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil 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.| InPlay Oil vs. ScanSource | InPlay Oil vs. Universal Health Realty | InPlay Oil vs. ARDAGH METAL PACDL 0001 | InPlay Oil vs. CVS Health |
| Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. AIR CHINA LTD | Aegean Airlines vs. RYANAIR HLDGS ADR | Aegean Airlines vs. Southwest Airlines 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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