Correlation Between Charter Communications and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both Charter Communications 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 Charter Communications and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and AEGEAN AIRLINES, you can compare the effects of market volatilities on Charter Communications 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 Charter Communications with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and AEGEAN AIRLINES.
Diversification Opportunities for Charter Communications and AEGEAN AIRLINES
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Charter and AEGEAN is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and Charter Communications 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 Charter Communications 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 Charter Communications i.e., Charter Communications and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between Charter Communications and AEGEAN AIRLINES
Assuming the 90 days trading horizon Charter Communications is expected to generate 1.58 times more return on investment than AEGEAN AIRLINES. However, Charter Communications is 1.58 times more volatile than AEGEAN AIRLINES. It trades about 0.01 of its potential returns per unit of risk. AEGEAN AIRLINES is currently generating about -0.01 per unit of risk. If you would invest 33,530 in Charter Communications on November 9, 2024 and sell it today you would earn a total of 410.00 from holding Charter Communications or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charter Communications vs. AEGEAN AIRLINES
Performance |
| Timeline |
| Charter Communications |
| AEGEAN AIRLINES |
Charter Communications and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charter Communications and AEGEAN AIRLINES
The main advantage of trading using opposite Charter Communications and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications 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.| Charter Communications vs. AEGEAN AIRLINES | Charter Communications vs. SANOK RUBBER ZY | Charter Communications vs. THRACE PLASTICS | Charter Communications vs. Materialise NV |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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