Correlation Between Aegean Airlines and Madrigal Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Madrigal Pharmaceuticals 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 Madrigal Pharmaceuticals 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 Madrigal Pharmaceuticals, you can compare the effects of market volatilities on Aegean Airlines and Madrigal Pharmaceuticals 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 Madrigal Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Madrigal Pharmaceuticals.
Diversification Opportunities for Aegean Airlines and Madrigal Pharmaceuticals
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aegean and Madrigal is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Madrigal Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madrigal Pharmaceuticals 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 Madrigal Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madrigal Pharmaceuticals has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Madrigal Pharmaceuticals go up and down completely randomly.
Pair Corralation between Aegean Airlines and Madrigal Pharmaceuticals
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Madrigal Pharmaceuticals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 3.05 times less risky than Madrigal Pharmaceuticals. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Madrigal Pharmaceuticals is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 20,248 in Madrigal Pharmaceuticals on August 24, 2024 and sell it today you would earn a total of 12,676 from holding Madrigal Pharmaceuticals or generate 62.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aegean Airlines SA vs. Madrigal Pharmaceuticals
Performance |
| Timeline |
| Aegean Airlines SA |
| Madrigal Pharmaceuticals |
Aegean Airlines and Madrigal Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Madrigal Pharmaceuticals
The main advantage of trading using opposite Aegean Airlines and Madrigal Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Madrigal Pharmaceuticals 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 Madrigal Pharmaceuticals will offset losses from the drop in Madrigal Pharmaceuticals' long position.| Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
| Madrigal Pharmaceuticals vs. Lyra Therapeutics | Madrigal Pharmaceuticals vs. Hookipa Pharma | Madrigal Pharmaceuticals vs. Cingulate Warrants | Madrigal Pharmaceuticals vs. SAB Biotherapeutics |
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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