Correlation Between Aegean Airlines and Optronics Technologies
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Optronics Technologies 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 Aegean Airlines and Optronics Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegean Airlines SA and Optronics Technologies SA, you can compare the effects of market volatilities on Aegean Airlines and Optronics Technologies 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 Aegean Airlines with a short position of Optronics Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Optronics Technologies.
Diversification Opportunities for Aegean Airlines and Optronics Technologies
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aegean and Optronics is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Optronics Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optronics Technologies and Aegean Airlines 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 Aegean Airlines SA are associated (or correlated) with Optronics Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optronics Technologies has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Optronics Technologies go up and down completely randomly.
Pair Corralation between Aegean Airlines and Optronics Technologies
Assuming the 90 days trading horizon Aegean Airlines SA is expected to generate 0.79 times more return on investment than Optronics Technologies. However, Aegean Airlines SA is 1.27 times less risky than Optronics Technologies. It trades about 0.07 of its potential returns per unit of risk. Optronics Technologies SA is currently generating about -0.01 per unit of risk. If you would invest 516.00 in Aegean Airlines SA on August 30, 2024 and sell it today you would earn a total of 450.00 from holding Aegean Airlines SA or generate 87.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aegean Airlines SA vs. Optronics Technologies SA
Performance |
| Timeline |
| Aegean Airlines SA |
| Optronics Technologies |
Aegean Airlines and Optronics Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Optronics Technologies
The main advantage of trading using opposite Aegean Airlines and Optronics Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Optronics Technologies 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 Optronics Technologies will offset losses from the drop in Optronics Technologies' long position.| Aegean Airlines vs. Mytilineos SA | Aegean Airlines vs. Greek Organization of | Aegean Airlines vs. Motor Oil Corinth | Aegean Airlines vs. Alpha Services and |
| Optronics Technologies vs. Admie Holding SA | Optronics Technologies vs. Coca Cola HBC AG | Optronics Technologies vs. Quest Holdings SA | Optronics Technologies vs. Motor Oil Corinth |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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