Correlation Between GOLD ROAD and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD 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 GOLD ROAD and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOLD ROAD RES and Aegean Airlines SA, you can compare the effects of market volatilities on GOLD ROAD 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 GOLD ROAD with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and Aegean Airlines.
Diversification Opportunities for GOLD ROAD and Aegean Airlines
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GOLD and Aegean is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES 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 GOLD ROAD 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 GOLD ROAD RES 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 GOLD ROAD i.e., GOLD ROAD and Aegean Airlines go up and down completely randomly.
Pair Corralation between GOLD ROAD and Aegean Airlines
Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 1.91 times more return on investment than Aegean Airlines. However, GOLD ROAD is 1.91 times more volatile than Aegean Airlines SA. It trades about 0.12 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 113.00 in GOLD ROAD RES on September 24, 2024 and sell it today you would earn a total of 8.00 from holding GOLD ROAD RES or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLD ROAD RES vs. Aegean Airlines SA
Performance |
| Timeline |
| GOLD ROAD RES |
| Aegean Airlines SA |
GOLD ROAD and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLD ROAD and Aegean Airlines
The main advantage of trading using opposite GOLD ROAD and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD 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.| GOLD ROAD vs. EEDUCATION ALBERT AB | GOLD ROAD vs. G8 EDUCATION | GOLD ROAD vs. EMBARK EDUCATION LTD | GOLD ROAD vs. Host Hotels Resorts |
| Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. Air China Limited | Aegean Airlines vs. AIR CHINA LTD | Aegean Airlines vs. RYANAIR HLDGS ADR |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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