Correlation Between Aegean Airlines and Old Dominion
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Old Dominion 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 Old Dominion 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 Old Dominion Freight, you can compare the effects of market volatilities on Aegean Airlines and Old Dominion 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 Old Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Old Dominion.
Diversification Opportunities for Aegean Airlines and Old Dominion
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aegean and Old is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Old Dominion Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Dominion Freight 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 Old Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Dominion Freight has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Old Dominion go up and down completely randomly.
Pair Corralation between Aegean Airlines and Old Dominion
Assuming the 90 days horizon Aegean Airlines is expected to generate 1.18 times less return on investment than Old Dominion. In addition to that, Aegean Airlines is 1.07 times more volatile than Old Dominion Freight. It trades about 0.04 of its total potential returns per unit of risk. Old Dominion Freight is currently generating about 0.06 per unit of volatility. If you would invest 15,495 in Old Dominion Freight on August 31, 2024 and sell it today you would earn a total of 6,916 from holding Old Dominion Freight or generate 44.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. Old Dominion Freight
Performance |
| Timeline |
| Aegean Airlines SA |
| Old Dominion Freight |
Aegean Airlines and Old Dominion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Old Dominion
The main advantage of trading using opposite Aegean Airlines and Old Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Old Dominion 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 Old Dominion will offset losses from the drop in Old Dominion'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 |
| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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