Correlation Between Dominos Pizza and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Dominos Pizza 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 Dominos Pizza and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dominos Pizza and Aegean Airlines SA, you can compare the effects of market volatilities on Dominos Pizza 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 Dominos Pizza with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominos Pizza and Aegean Airlines.
Diversification Opportunities for Dominos Pizza and Aegean Airlines
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dominos and Aegean is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza 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 Dominos Pizza 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 Dominos Pizza 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 Dominos Pizza i.e., Dominos Pizza and Aegean Airlines go up and down completely randomly.
Pair Corralation between Dominos Pizza and Aegean Airlines
Considering the 90-day investment horizon Dominos Pizza is expected to generate 0.79 times more return on investment than Aegean Airlines. However, Dominos Pizza is 1.27 times less risky than Aegean Airlines. It trades about 0.39 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.21 per unit of risk. If you would invest 41,373 in Dominos Pizza on September 1, 2024 and sell it today you would earn a total of 6,246 from holding Dominos Pizza or generate 15.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dominos Pizza vs. Aegean Airlines SA
Performance |
| Timeline |
| Dominos Pizza |
| Aegean Airlines SA |
Dominos Pizza and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dominos Pizza and Aegean Airlines
The main advantage of trading using opposite Dominos Pizza and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominos Pizza 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.| Dominos Pizza vs. The Wendys Co | Dominos Pizza vs. Shake Shack | Dominos Pizza vs. Papa Johns International | Dominos Pizza vs. Darden Restaurants |
| Aegean Airlines vs. Legacy Education | Aegean Airlines vs. Apple Inc | Aegean Airlines vs. NVIDIA | Aegean Airlines vs. Microsoft |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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