Correlation Between Digi International and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Digi International 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 Digi International and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Aegean Airlines SA, you can compare the effects of market volatilities on Digi International 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 Digi International with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Aegean Airlines.
Diversification Opportunities for Digi International and Aegean Airlines
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Digi and Aegean is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Digi International 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 Digi International 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 Digi International 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 Digi International i.e., Digi International and Aegean Airlines go up and down completely randomly.
Pair Corralation between Digi International and Aegean Airlines
Given the investment horizon of 90 days Digi International is expected to generate 10.85 times less return on investment than Aegean Airlines. In addition to that, Digi International is 1.27 times more volatile than Aegean Airlines SA. It trades about 0.0 of its total potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.04 per unit of volatility. If you would invest 873.00 in Aegean Airlines SA on August 31, 2024 and sell it today you would earn a total of 212.00 from holding Aegean Airlines SA or generate 24.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Digi International vs. Aegean Airlines SA
Performance |
| Timeline |
| Digi International |
| Aegean Airlines SA |
Digi International and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Aegean Airlines
The main advantage of trading using opposite Digi International and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International 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.| Digi International vs. Extreme Networks | Digi International vs. Ciena Corp | Digi International vs. Harmonic | Digi International vs. Comtech Telecommunications Corp |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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