Correlation Between Aegean Airlines and Western Asset
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Western Asset 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 Western Asset 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 Western Asset Investment, you can compare the effects of market volatilities on Aegean Airlines and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Western Asset.
Diversification Opportunities for Aegean Airlines and Western Asset
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aegean and Western is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Western Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Investment 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Investment has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Western Asset go up and down completely randomly.
Pair Corralation between Aegean Airlines and Western Asset
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Western Asset. In addition to that, Aegean Airlines is 4.56 times more volatile than Western Asset Investment. It trades about -0.21 of its total potential returns per unit of risk. Western Asset Investment is currently generating about -0.02 per unit of volatility. If you would invest 1,679 in Western Asset Investment on September 1, 2024 and sell it today you would lose (4.00) from holding Western Asset Investment or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aegean Airlines SA vs. Western Asset Investment
Performance |
| Timeline |
| Aegean Airlines SA |
| Western Asset Investment |
Aegean Airlines and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Western Asset
The main advantage of trading using opposite Aegean Airlines and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Aegean Airlines vs. Legacy Education | Aegean Airlines vs. Apple Inc | Aegean Airlines vs. NVIDIA | Aegean Airlines vs. Microsoft |
| Western Asset vs. Visa Class A | Western Asset vs. Diamond Hill Investment | Western Asset vs. Distoken Acquisition | Western Asset vs. Associated Capital Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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