Correlation Between Aegean Airlines and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Kaiser Aluminum 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 Kaiser Aluminum 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 Kaiser Aluminum, you can compare the effects of market volatilities on Aegean Airlines and Kaiser Aluminum 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 Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Kaiser Aluminum.
Diversification Opportunities for Aegean Airlines and Kaiser Aluminum
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aegean and Kaiser is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum 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 Kaiser Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Aegean Airlines and Kaiser Aluminum
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Kaiser Aluminum. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 1.55 times less risky than Kaiser Aluminum. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Kaiser Aluminum is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,308 in Kaiser Aluminum on August 28, 2024 and sell it today you would earn a total of 2,070 from holding Kaiser Aluminum or generate 32.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Aegean Airlines SA vs. Kaiser Aluminum
Performance |
| Timeline |
| Aegean Airlines SA |
| Kaiser Aluminum |
Aegean Airlines and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Kaiser Aluminum
The main advantage of trading using opposite Aegean Airlines and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Kaiser Aluminum 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 Kaiser Aluminum will offset losses from the drop in Kaiser Aluminum'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 |
| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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