Correlation Between Air Products and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Air Products 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 Air Products and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products and and Aegean Airlines SA, you can compare the effects of market volatilities on Air Products 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 Air Products with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Aegean Airlines.
Diversification Opportunities for Air Products and Aegean Airlines
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and Aegean is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and 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 Air Products 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 Air Products and 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 Air Products i.e., Air Products and Aegean Airlines go up and down completely randomly.
Pair Corralation between Air Products and Aegean Airlines
Considering the 90-day investment horizon Air Products and is expected to generate 0.96 times more return on investment than Aegean Airlines. However, Air Products and is 1.04 times less risky than Aegean Airlines. It trades about 0.13 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.12 per unit of risk. If you would invest 25,718 in Air Products and on August 28, 2024 and sell it today you would earn a total of 7,679 from holding Air Products and or generate 29.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Aegean Airlines SA
Performance |
| Timeline |
| Air Products |
| Aegean Airlines SA |
Air Products and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Aegean Airlines
The main advantage of trading using opposite Air Products and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products 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.| Air Products vs. PPG Industries | Air Products vs. Ecolab Inc | Air Products vs. Sherwin Williams Co | Air Products vs. LyondellBasell Industries NV |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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