Correlation Between Aegean Airlines and Travelers Companies
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Travelers Companies 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 Travelers Companies 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 The Travelers Companies, you can compare the effects of market volatilities on Aegean Airlines and Travelers Companies 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 Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Travelers Companies.
Diversification Opportunities for Aegean Airlines and Travelers Companies
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aegean and Travelers is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and The Travelers Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Travelers Companies 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 Travelers Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Travelers Companies has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Travelers Companies go up and down completely randomly.
Pair Corralation between Aegean Airlines and Travelers Companies
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Travelers Companies. In addition to that, Aegean Airlines is 1.79 times more volatile than The Travelers Companies. It trades about -0.22 of its total potential returns per unit of risk. The Travelers Companies is currently generating about 0.13 per unit of volatility. If you would invest 25,237 in The Travelers Companies on August 28, 2024 and sell it today you would earn a total of 885.00 from holding The Travelers Companies or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. The Travelers Companies
Performance |
| Timeline |
| Aegean Airlines SA |
| The Travelers Companies |
Aegean Airlines and Travelers Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Travelers Companies
The main advantage of trading using opposite Aegean Airlines and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Travelers Companies 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 Travelers Companies will offset losses from the drop in Travelers Companies' long position.| Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
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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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