Correlation Between Aegean Airlines and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and PennantPark Investment 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 PennantPark Investment 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 PennantPark Investment, you can compare the effects of market volatilities on Aegean Airlines and PennantPark Investment 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 PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and PennantPark Investment.
Diversification Opportunities for Aegean Airlines and PennantPark Investment
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aegean and PennantPark is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark 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 PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and PennantPark Investment go up and down completely randomly.
Pair Corralation between Aegean Airlines and PennantPark Investment
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the PennantPark Investment. In addition to that, Aegean Airlines is 1.72 times more volatile than PennantPark Investment. It trades about -0.21 of its total potential returns per unit of risk. PennantPark Investment is currently generating about -0.01 per unit of volatility. If you would invest 695.00 in PennantPark Investment on August 29, 2024 and sell it today you would lose (4.00) from holding PennantPark Investment or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aegean Airlines SA vs. PennantPark Investment
Performance |
| Timeline |
| Aegean Airlines SA |
| PennantPark Investment |
Aegean Airlines and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and PennantPark Investment
The main advantage of trading using opposite Aegean Airlines and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| Aegean Airlines vs. Apple Inc | Aegean Airlines vs. Microsoft | Aegean Airlines vs. Alphabet Inc Class C | Aegean Airlines vs. Meta Platforms |
| PennantPark Investment vs. TPG Inc | PennantPark Investment vs. Carlyle Secured Lending | PennantPark Investment vs. Brookfield 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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