Correlation Between USWE SPORTS and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS 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 USWE SPORTS and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USWE SPORTS AB and Aegean Airlines SA, you can compare the effects of market volatilities on USWE SPORTS 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 USWE SPORTS with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and Aegean Airlines.
Diversification Opportunities for USWE SPORTS and Aegean Airlines
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between USWE and Aegean is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB 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 USWE SPORTS 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 USWE SPORTS AB 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 USWE SPORTS i.e., USWE SPORTS and Aegean Airlines go up and down completely randomly.
Pair Corralation between USWE SPORTS and Aegean Airlines
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 1.9 times more return on investment than Aegean Airlines. However, USWE SPORTS is 1.9 times more volatile than Aegean Airlines SA. It trades about -0.02 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.1 per unit of risk. If you would invest 90.00 in USWE SPORTS AB on September 1, 2024 and sell it today you would lose (14.00) from holding USWE SPORTS AB or give up 15.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. Aegean Airlines SA
Performance |
| Timeline |
| USWE SPORTS AB |
| Aegean Airlines SA |
USWE SPORTS and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and Aegean Airlines
The main advantage of trading using opposite USWE SPORTS and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS 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.| USWE SPORTS vs. Li Ning Company | USWE SPORTS vs. Trip Group Limited | USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. NMI Holdings |
| Aegean Airlines vs. Southwest Airlines Co | Aegean Airlines vs. Superior Plus Corp | Aegean Airlines vs. NMI Holdings | Aegean Airlines vs. Origin Agritech |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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