Correlation Between PT Bank and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Maybank and Aegean Airlines SA, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Aegean Airlines.
Diversification Opportunities for PT Bank and Aegean Airlines
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BOZA and Aegean is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Maybank 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 PT Bank 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 PT Bank Maybank 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 PT Bank i.e., PT Bank and Aegean Airlines go up and down completely randomly.
Pair Corralation between PT Bank and Aegean Airlines
Assuming the 90 days trading horizon PT Bank Maybank is expected to generate 2.55 times more return on investment than Aegean Airlines. However, PT Bank is 2.55 times more volatile than Aegean Airlines SA. It trades about 0.01 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.02 per unit of risk. If you would invest 1.50 in PT Bank Maybank on September 4, 2024 and sell it today you would lose (0.25) from holding PT Bank Maybank or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
PT Bank Maybank vs. Aegean Airlines SA
Performance |
| Timeline |
| PT Bank Maybank |
| Aegean Airlines SA |
PT Bank and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Aegean Airlines
The main advantage of trading using opposite PT Bank and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.| PT Bank vs. Magic Software Enterprises | PT Bank vs. Constellation Software | PT Bank vs. Sqs Software Quality | PT Bank vs. Soken Chemical Engineering |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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