Correlation Between National Retail and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both National Retail 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 National Retail and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Retail Properties and AEGEAN AIRLINES, you can compare the effects of market volatilities on National Retail 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 National Retail with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and AEGEAN AIRLINES.
Diversification Opportunities for National Retail and AEGEAN AIRLINES
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and AEGEAN is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and National Retail 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 National Retail Properties 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 National Retail i.e., National Retail and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between National Retail and AEGEAN AIRLINES
Assuming the 90 days trading horizon National Retail Properties is expected to under-perform the AEGEAN AIRLINES. In addition to that, National Retail is 1.3 times more volatile than AEGEAN AIRLINES. It trades about -0.17 of its total potential returns per unit of risk. AEGEAN AIRLINES is currently generating about -0.05 per unit of volatility. If you would invest 1,018 in AEGEAN AIRLINES on October 17, 2024 and sell it today you would lose (11.00) from holding AEGEAN AIRLINES or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Retail Properties vs. AEGEAN AIRLINES
Performance |
| Timeline |
| National Retail Prop |
| AEGEAN AIRLINES |
National Retail and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and AEGEAN AIRLINES
The main advantage of trading using opposite National Retail and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail 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.| National Retail vs. Performance Food Group | National Retail vs. PNC Financial Services | National Retail vs. Direct Line Insurance | National Retail vs. Sun Life Financial |
| AEGEAN AIRLINES vs. National Retail Properties | AEGEAN AIRLINES vs. FAST RETAIL ADR | AEGEAN AIRLINES vs. Endeavour Mining PLC | AEGEAN AIRLINES vs. Costco Wholesale Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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