Correlation Between Aegean Airlines and Profile Systems
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Profile Systems 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 Profile Systems 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 Profile Systems Software, you can compare the effects of market volatilities on Aegean Airlines and Profile Systems 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 Profile Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Profile Systems.
Diversification Opportunities for Aegean Airlines and Profile Systems
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aegean and Profile is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Profile Systems Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profile Systems Software 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 Profile Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profile Systems Software has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Profile Systems go up and down completely randomly.
Pair Corralation between Aegean Airlines and Profile Systems
Assuming the 90 days trading horizon Aegean Airlines is expected to generate 1.47 times less return on investment than Profile Systems. In addition to that, Aegean Airlines is 1.02 times more volatile than Profile Systems Software. It trades about 0.05 of its total potential returns per unit of risk. Profile Systems Software is currently generating about 0.07 per unit of volatility. If you would invest 304.00 in Profile Systems Software on November 9, 2024 and sell it today you would earn a total of 221.00 from holding Profile Systems Software or generate 72.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. Profile Systems Software
Performance |
| Timeline |
| Aegean Airlines SA |
| Profile Systems Software |
Aegean Airlines and Profile Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Profile Systems
The main advantage of trading using opposite Aegean Airlines and Profile Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Profile Systems 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 Profile Systems will offset losses from the drop in Profile Systems' 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 |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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