Correlation Between EMBARK EDUCATION and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both EMBARK EDUCATION 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 EMBARK EDUCATION and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMBARK EDUCATION LTD and Aegean Airlines SA, you can compare the effects of market volatilities on EMBARK EDUCATION 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 EMBARK EDUCATION with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMBARK EDUCATION and Aegean Airlines.
Diversification Opportunities for EMBARK EDUCATION and Aegean Airlines
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EMBARK and Aegean is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding EMBARK EDUCATION LTD 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 EMBARK EDUCATION 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 EMBARK EDUCATION LTD 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 EMBARK EDUCATION i.e., EMBARK EDUCATION and Aegean Airlines go up and down completely randomly.
Pair Corralation between EMBARK EDUCATION and Aegean Airlines
Assuming the 90 days horizon EMBARK EDUCATION LTD is expected to generate 0.38 times more return on investment than Aegean Airlines. However, EMBARK EDUCATION LTD is 2.65 times less risky than Aegean Airlines. It trades about 0.22 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.08 per unit of risk. If you would invest 30.00 in EMBARK EDUCATION LTD on September 14, 2024 and sell it today you would earn a total of 1.00 from holding EMBARK EDUCATION LTD or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
EMBARK EDUCATION LTD vs. Aegean Airlines SA
Performance |
| Timeline |
| EMBARK EDUCATION LTD |
| Aegean Airlines SA |
EMBARK EDUCATION and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMBARK EDUCATION and Aegean Airlines
The main advantage of trading using opposite EMBARK EDUCATION and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMBARK EDUCATION 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.| EMBARK EDUCATION vs. IDP EDUCATION LTD | EMBARK EDUCATION vs. Strategic Education | EMBARK EDUCATION vs. Laureate Education | EMBARK EDUCATION vs. Superior Plus Corp |
| Aegean Airlines vs. RYANAIR HLDGS ADR | Aegean Airlines vs. Ryanair Holdings plc | Aegean Airlines vs. Superior Plus Corp | Aegean Airlines vs. SIVERS SEMICONDUCTORS AB |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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