Correlation Between EasyJet PLC and Octopus Aim
Can any of the company-specific risk be diversified away by investing in both EasyJet PLC and Octopus Aim 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 Octopus Aim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EasyJet PLC and Octopus Aim Vct, you can compare the effects of market volatilities on EasyJet PLC and Octopus Aim 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 Octopus Aim. Check out your portfolio center. Please also check ongoing floating volatility patterns of EasyJet PLC and Octopus Aim.
Diversification Opportunities for EasyJet PLC and Octopus Aim
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between EasyJet and Octopus is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding EasyJet PLC and Octopus Aim Vct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Octopus Aim Vct 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 Octopus Aim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Octopus Aim Vct has no effect on the direction of EasyJet PLC i.e., EasyJet PLC and Octopus Aim go up and down completely randomly.
Pair Corralation between EasyJet PLC and Octopus Aim
Assuming the 90 days trading horizon EasyJet PLC is expected to generate 2.22 times more return on investment than Octopus Aim. However, EasyJet PLC is 2.22 times more volatile than Octopus Aim Vct. It trades about 0.05 of its potential returns per unit of risk. Octopus Aim Vct is currently generating about -0.1 per unit of risk. If you would invest 45,040 in EasyJet PLC on October 13, 2024 and sell it today you would earn a total of 5,740 from holding EasyJet PLC or generate 12.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EasyJet PLC vs. Octopus Aim Vct
Performance |
| Timeline |
| EasyJet PLC |
| Octopus Aim Vct |
EasyJet PLC and Octopus Aim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EasyJet PLC and Octopus Aim
The main advantage of trading using opposite EasyJet PLC and Octopus Aim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EasyJet PLC position performs unexpectedly, Octopus Aim 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 Octopus Aim will offset losses from the drop in Octopus Aim's long position.| EasyJet PLC vs. Cornish Metals | EasyJet PLC vs. Applied Materials | EasyJet PLC vs. Travel Leisure Co | EasyJet PLC vs. Capital Metals PLC |
| Octopus Aim vs. Golden Metal Resources | Octopus Aim vs. Aeorema Communications Plc | Octopus Aim vs. Jacquet Metal Service | Octopus Aim vs. Fulcrum Metals PLC |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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