Correlation Between Analog Devices and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Analog Devices 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 Analog Devices and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Devices and Aegean Airlines SA, you can compare the effects of market volatilities on Analog Devices 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 Analog Devices with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Aegean Airlines.
Diversification Opportunities for Analog Devices and Aegean Airlines
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Analog and Aegean is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices 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 Analog Devices 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 Analog Devices 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 Analog Devices i.e., Analog Devices and Aegean Airlines go up and down completely randomly.
Pair Corralation between Analog Devices and Aegean Airlines
Considering the 90-day investment horizon Analog Devices is expected to generate 0.87 times more return on investment than Aegean Airlines. However, Analog Devices is 1.15 times less risky than Aegean Airlines. It trades about -0.06 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.22 per unit of risk. If you would invest 22,419 in Analog Devices on September 3, 2024 and sell it today you would lose (614.00) from holding Analog Devices or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Analog Devices vs. Aegean Airlines SA
Performance |
| Timeline |
| Analog Devices |
| Aegean Airlines SA |
Analog Devices and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and Aegean Airlines
The main advantage of trading using opposite Analog Devices and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices 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.| Analog Devices vs. Silicon Motion Technology | Analog Devices vs. ASE Industrial Holding | Analog Devices vs. SemiLEDS | Analog Devices vs. Advanced Micro Devices |
| Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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