Correlation Between Aegean Airlines and Microchip Technology
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Microchip Technology 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 Microchip Technology 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 Microchip Technology, you can compare the effects of market volatilities on Aegean Airlines and Microchip Technology 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 Microchip Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Microchip Technology.
Diversification Opportunities for Aegean Airlines and Microchip Technology
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aegean and Microchip is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Microchip Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microchip Technology 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 Microchip Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microchip Technology has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Microchip Technology go up and down completely randomly.
Pair Corralation between Aegean Airlines and Microchip Technology
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Microchip Technology. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 1.13 times less risky than Microchip Technology. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Microchip Technology is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 7,667 in Microchip Technology on August 28, 2024 and sell it today you would lose (682.00) from holding Microchip Technology or give up 8.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. Microchip Technology
Performance |
| Timeline |
| Aegean Airlines SA |
| Microchip Technology |
Aegean Airlines and Microchip Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Microchip Technology
The main advantage of trading using opposite Aegean Airlines and Microchip Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Microchip Technology 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 Microchip Technology will offset losses from the drop in Microchip Technology'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 |
| Microchip Technology vs. Texas Instruments Incorporated | Microchip Technology vs. ON Semiconductor | Microchip Technology vs. Analog Devices | Microchip Technology vs. Qorvo Inc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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