Correlation Between Koninklijke Ahold and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both Koninklijke Ahold and AEGEAN AIRLINES 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 Koninklijke Ahold and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Ahold Delhaize and AEGEAN AIRLINES, you can compare the effects of market volatilities on Koninklijke Ahold and AEGEAN AIRLINES 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 Koninklijke Ahold with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Ahold and AEGEAN AIRLINES.
Diversification Opportunities for Koninklijke Ahold and AEGEAN AIRLINES
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Koninklijke and AEGEAN is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Ahold Delhaize and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and Koninklijke Ahold 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 Koninklijke Ahold Delhaize are associated (or correlated) with AEGEAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEGEAN AIRLINES has no effect on the direction of Koninklijke Ahold i.e., Koninklijke Ahold and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between Koninklijke Ahold and AEGEAN AIRLINES
Assuming the 90 days trading horizon Koninklijke Ahold Delhaize is expected to generate 0.58 times more return on investment than AEGEAN AIRLINES. However, Koninklijke Ahold Delhaize is 1.72 times less risky than AEGEAN AIRLINES. It trades about 0.02 of its potential returns per unit of risk. AEGEAN AIRLINES is currently generating about -0.01 per unit of risk. If you would invest 2,982 in Koninklijke Ahold Delhaize on September 12, 2024 and sell it today you would earn a total of 240.00 from holding Koninklijke Ahold Delhaize or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Ahold Delhaize vs. AEGEAN AIRLINES
Performance |
| Timeline |
| Koninklijke Ahold |
| AEGEAN AIRLINES |
Koninklijke Ahold and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Ahold and AEGEAN AIRLINES
The main advantage of trading using opposite Koninklijke Ahold and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Ahold position performs unexpectedly, AEGEAN AIRLINES 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 AEGEAN AIRLINES will offset losses from the drop in AEGEAN AIRLINES's long position.| Koninklijke Ahold vs. AEGEAN AIRLINES | Koninklijke Ahold vs. Vastned Retail NV | Koninklijke Ahold vs. United Airlines Holdings | Koninklijke Ahold vs. MARKET VECTR RETAIL |
| AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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