Correlation Between EasyJet Plc and Air France

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both EasyJet Plc and Air France 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 EasyJet Plc and Air France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between easyJet plc and Air France KLM SA, you can compare the effects of market volatilities on EasyJet Plc and Air France 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 EasyJet Plc with a short position of Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of EasyJet Plc and Air France.

Diversification Opportunities for EasyJet Plc and Air France

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between EasyJet and Air is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding easyJet plc and Air France KLM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM and EasyJet Plc 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 easyJet plc are associated (or correlated) with Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of EasyJet Plc i.e., EasyJet Plc and Air France go up and down completely randomly.

Pair Corralation between EasyJet Plc and Air France

Assuming the 90 days horizon easyJet plc is expected to under-perform the Air France. In addition to that, EasyJet Plc is 1.72 times more volatile than Air France KLM SA. It trades about -0.32 of its total potential returns per unit of risk. Air France KLM SA is currently generating about -0.22 per unit of volatility. If you would invest  855.00  in Air France KLM SA on October 20, 2024 and sell it today you would lose (30.00) from holding Air France KLM SA or give up 3.51% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.0%
ValuesDaily Returns

easyJet plc  vs.  Air France KLM SA

 Performance 
       Timeline  
easyJet plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days easyJet plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EasyJet Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Air France KLM 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Air France KLM SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

EasyJet Plc and Air France Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with EasyJet Plc and Air France

The main advantage of trading using opposite EasyJet Plc and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EasyJet Plc position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.
EasyJet Plc vs. Finnair Oyj
EasyJet Plc vs. Norse Atlantic ASA
EasyJet Plc vs. Air New Zealand
EasyJet Plc vs. Air China Limited
The idea behind easyJet plc and Air France KLM SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Air France vs. Cebu Air
Air France vs. easyJet plc
Air France vs. Norse Atlantic ASA
Air France vs. Air China Limited
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

Other Complementary Tools

CEOs Directory
Screen CEOs from public companies around the world
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY