Correlation Between Aegean Airlines and Cisco Systems
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Cisco 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 Cisco 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 Cisco Systems, you can compare the effects of market volatilities on Aegean Airlines and Cisco 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 Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Cisco Systems.
Diversification Opportunities for Aegean Airlines and Cisco Systems
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aegean and Cisco is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems 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 Cisco Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisco Systems has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Cisco Systems go up and down completely randomly.
Pair Corralation between Aegean Airlines and Cisco Systems
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Cisco Systems. In addition to that, Aegean Airlines is 2.11 times more volatile than Cisco Systems. It trades about -0.22 of its total potential returns per unit of risk. Cisco Systems is currently generating about 0.27 per unit of volatility. If you would invest 5,528 in Cisco Systems on August 28, 2024 and sell it today you would earn a total of 346.00 from holding Cisco Systems or generate 6.26% 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. Cisco Systems
Performance |
| Timeline |
| Aegean Airlines SA |
| Cisco Systems |
Aegean Airlines and Cisco Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Cisco Systems
The main advantage of trading using opposite Aegean Airlines and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Cisco 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 Cisco Systems will offset losses from the drop in Cisco Systems' long position.| Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
| Cisco Systems vs. Ichor Holdings | Cisco Systems vs. Fabrinet | Cisco Systems vs. Hello Group | Cisco Systems vs. Ultra Clean Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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