Correlation Between Aegean Airlines and Church Dwight
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Church Dwight 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 Church Dwight 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 Church Dwight, you can compare the effects of market volatilities on Aegean Airlines and Church Dwight 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 Church Dwight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Church Dwight.
Diversification Opportunities for Aegean Airlines and Church Dwight
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aegean and Church is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Church Dwight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Church Dwight 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 Church Dwight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Church Dwight has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Church Dwight go up and down completely randomly.
Pair Corralation between Aegean Airlines and Church Dwight
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Church Dwight. In addition to that, Aegean Airlines is 1.64 times more volatile than Church Dwight. It trades about -0.22 of its total potential returns per unit of risk. Church Dwight is currently generating about 0.32 per unit of volatility. If you would invest 10,078 in Church Dwight on August 28, 2024 and sell it today you would earn a total of 963.00 from holding Church Dwight or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. Church Dwight
Performance |
| Timeline |
| Aegean Airlines SA |
| Church Dwight |
Aegean Airlines and Church Dwight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Church Dwight
The main advantage of trading using opposite Aegean Airlines and Church Dwight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Church Dwight 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 Church Dwight will offset losses from the drop in Church Dwight's long position.| Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
| Church Dwight vs. Kimberly Clark | Church Dwight vs. Colgate Palmolive | Church Dwight vs. Unilever PLC ADR | Church Dwight vs. Procter Gamble |
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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