Correlation Between Japan Tobacco and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both Japan Tobacco 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 Japan Tobacco and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Tobacco and AEGEAN AIRLINES, you can compare the effects of market volatilities on Japan Tobacco 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 Japan Tobacco with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Tobacco and AEGEAN AIRLINES.
Diversification Opportunities for Japan Tobacco and AEGEAN AIRLINES
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Japan and AEGEAN is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Japan Tobacco and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and Japan Tobacco 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 Japan Tobacco 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 has no effect on the direction of Japan Tobacco i.e., Japan Tobacco and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between Japan Tobacco and AEGEAN AIRLINES
Assuming the 90 days horizon Japan Tobacco is expected to under-perform the AEGEAN AIRLINES. But the stock apears to be less risky and, when comparing its historical volatility, Japan Tobacco is 1.12 times less risky than AEGEAN AIRLINES. The stock trades about -0.08 of its potential returns per unit of risk. The AEGEAN AIRLINES is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,067 in AEGEAN AIRLINES on December 2, 2024 and sell it today you would earn a total of 1.00 from holding AEGEAN AIRLINES or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Tobacco vs. AEGEAN AIRLINES
Performance |
| Timeline |
| Japan Tobacco |
| AEGEAN AIRLINES |
Japan Tobacco and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Tobacco and AEGEAN AIRLINES
The main advantage of trading using opposite Japan Tobacco and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Tobacco 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's long position.| Japan Tobacco vs. Vienna Insurance Group | Japan Tobacco vs. Direct Line Insurance | Japan Tobacco vs. UNIQA INSURANCE GR | Japan Tobacco vs. The Hanover Insurance |
| AEGEAN AIRLINES vs. Marie Brizard Wine | AEGEAN AIRLINES vs. VIVA WINE GROUP | AEGEAN AIRLINES vs. BOS BETTER ONLINE | AEGEAN AIRLINES vs. YATRA ONLINE DL 0001 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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