Correlation Between Aegean Airlines and ATT
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Aegean Airlines and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and ATT.
Diversification Opportunities for Aegean Airlines and ATT
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aegean and ATT is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and ATT go up and down completely randomly.
Pair Corralation between Aegean Airlines and ATT
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the ATT. In addition to that, Aegean Airlines is 1.9 times more volatile than ATT Inc. It trades about -0.21 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.12 per unit of volatility. If you would invest 2,249 in ATT Inc on August 24, 2024 and sell it today you would earn a total of 70.50 from holding ATT Inc or generate 3.13% 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. ATT Inc
Performance |
| Timeline |
| Aegean Airlines SA |
| ATT Inc |
Aegean Airlines and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and ATT
The main advantage of trading using opposite Aegean Airlines and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT'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 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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