Correlation Between Highlight Communications and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Highlight Communications 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 Highlight Communications and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and Aegean Airlines SA, you can compare the effects of market volatilities on Highlight Communications 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 Highlight Communications with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and Aegean Airlines.
Diversification Opportunities for Highlight Communications and Aegean Airlines
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Highlight and Aegean is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG 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 Highlight Communications 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 Highlight Communications AG 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 Highlight Communications i.e., Highlight Communications and Aegean Airlines go up and down completely randomly.
Pair Corralation between Highlight Communications and Aegean Airlines
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 7.18 times more return on investment than Aegean Airlines. However, Highlight Communications is 7.18 times more volatile than Aegean Airlines SA. It trades about 0.22 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.3 per unit of risk. If you would invest 115.00 in Highlight Communications AG on October 12, 2024 and sell it today you would earn a total of 31.00 from holding Highlight Communications AG or generate 26.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Highlight Communications AG vs. Aegean Airlines SA
Performance |
| Timeline |
| Highlight Communications |
| Aegean Airlines SA |
Highlight Communications and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and Aegean Airlines
The main advantage of trading using opposite Highlight Communications and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications 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.| Highlight Communications vs. Amkor Technology | Highlight Communications vs. JAPAN TOBACCO UNSPADR12 | Highlight Communications vs. Kingdee International Software | Highlight Communications vs. PACIFIC ONLINE |
| Aegean Airlines vs. Bio Techne Corp | Aegean Airlines vs. T MOBILE US | Aegean Airlines vs. Entravision Communications | Aegean Airlines vs. SOCKET MOBILE NEW |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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