Correlation Between Allegiant Travel and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Allegiant Travel 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 Allegiant Travel and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegiant Travel and Aegean Airlines SA, you can compare the effects of market volatilities on Allegiant Travel 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 Allegiant Travel with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegiant Travel and Aegean Airlines.
Diversification Opportunities for Allegiant Travel and Aegean Airlines
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Allegiant and Aegean is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Allegiant Travel and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA and Allegiant Travel 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 Allegiant Travel 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 SA has no effect on the direction of Allegiant Travel i.e., Allegiant Travel and Aegean Airlines go up and down completely randomly.
Pair Corralation between Allegiant Travel and Aegean Airlines
Given the investment horizon of 90 days Allegiant Travel is expected to generate 1.77 times more return on investment than Aegean Airlines. However, Allegiant Travel is 1.77 times more volatile than Aegean Airlines SA. It trades about 0.3 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.21 per unit of risk. If you would invest 6,501 in Allegiant Travel on September 1, 2024 and sell it today you would earn a total of 1,683 from holding Allegiant Travel or generate 25.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Allegiant Travel vs. Aegean Airlines SA
Performance |
| Timeline |
| Allegiant Travel |
| Aegean Airlines SA |
Allegiant Travel and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegiant Travel and Aegean Airlines
The main advantage of trading using opposite Allegiant Travel and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegiant Travel 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' long position.| Allegiant Travel vs. Canadian Pacific Railway | Allegiant Travel vs. Werner Enterprises | Allegiant Travel vs. Canadian National Railway | Allegiant Travel vs. CSX Corporation |
| Aegean Airlines vs. Legacy Education | Aegean Airlines vs. Apple Inc | Aegean Airlines vs. NVIDIA | Aegean Airlines vs. Microsoft |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |