Correlation Between Commonwealth Bank and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Commonwealth 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 Commonwealth 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 Commonwealth Bank of and Aegean Airlines SA, you can compare the effects of market volatilities on Commonwealth 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 Commonwealth Bank with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and Aegean Airlines.
Diversification Opportunities for Commonwealth Bank and Aegean Airlines
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commonwealth and Aegean is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of 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 Commonwealth 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 Commonwealth Bank of 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 Commonwealth Bank i.e., Commonwealth Bank and Aegean Airlines go up and down completely randomly.
Pair Corralation between Commonwealth Bank and Aegean Airlines
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 0.74 times more return on investment than Aegean Airlines. However, Commonwealth Bank of is 1.36 times less risky than Aegean Airlines. It trades about 0.14 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 6,144 in Commonwealth Bank of on September 4, 2024 and sell it today you would earn a total of 3,592 from holding Commonwealth Bank of or generate 58.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Commonwealth Bank of vs. Aegean Airlines SA
Performance |
| Timeline |
| Commonwealth Bank |
| Aegean Airlines SA |
Commonwealth Bank and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and Aegean Airlines
The main advantage of trading using opposite Commonwealth Bank and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth 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.| Commonwealth Bank vs. CARSALESCOM | Commonwealth Bank vs. National Retail Properties | Commonwealth Bank vs. BROADWIND ENRGY | Commonwealth Bank vs. Fukuyama Transporting Co |
| Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. AIR CHINA LTD | Aegean Airlines vs. RYANAIR HLDGS ADR | Aegean Airlines vs. Southwest Airlines Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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