Correlation Between Fast Retailing and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Fast Retailing 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 Fast Retailing and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Retailing Co and Aegean Airlines SA, you can compare the effects of market volatilities on Fast Retailing 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 Fast Retailing with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Aegean Airlines.
Diversification Opportunities for Fast Retailing and Aegean Airlines
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fast and Aegean is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co 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 Fast Retailing 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 Fast Retailing Co 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 Fast Retailing i.e., Fast Retailing and Aegean Airlines go up and down completely randomly.
Pair Corralation between Fast Retailing and Aegean Airlines
Assuming the 90 days trading horizon Fast Retailing is expected to generate 1.53 times less return on investment than Aegean Airlines. But when comparing it to its historical volatility, Fast Retailing Co is 1.39 times less risky than Aegean Airlines. It trades about 0.06 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Aegean Airlines SA on September 4, 2024 and sell it today you would earn a total of 475.00 from holding Aegean Airlines SA or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fast Retailing Co vs. Aegean Airlines SA
Performance |
| Timeline |
| Fast Retailing |
| Aegean Airlines SA |
Fast Retailing and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Aegean Airlines
The main advantage of trading using opposite Fast Retailing and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing 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.| Fast Retailing vs. TOTAL GABON | Fast Retailing vs. Walgreens Boots Alliance | Fast Retailing vs. Peak Resources Limited |
| Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. AIR CHINA LTD | Aegean Airlines vs. RYANAIR HLDGS ADR | Aegean Airlines vs. Southwest Airlines Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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