Correlation Between JD Sports and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both JD Sports 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 JD Sports and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Sports Fashion and Aegean Airlines SA, you can compare the effects of market volatilities on JD Sports 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 JD Sports with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Aegean Airlines.
Diversification Opportunities for JD Sports and Aegean Airlines
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between JDDSF and Aegean is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion 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 JD Sports 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 JD Sports Fashion 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 JD Sports i.e., JD Sports and Aegean Airlines go up and down completely randomly.
Pair Corralation between JD Sports and Aegean Airlines
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the Aegean Airlines. In addition to that, JD Sports is 1.71 times more volatile than Aegean Airlines SA. It trades about -0.21 of its total potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.22 per unit of volatility. If you would invest 1,213 in Aegean Airlines SA on August 28, 2024 and sell it today you would lose (128.00) from holding Aegean Airlines SA or give up 10.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Sports Fashion vs. Aegean Airlines SA
Performance |
| Timeline |
| JD Sports Fashion |
| Aegean Airlines SA |
JD Sports and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Aegean Airlines
The main advantage of trading using opposite JD Sports and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports 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.The idea behind JD Sports Fashion and Aegean Airlines 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.| Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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