Correlation Between Optima Bank and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Optima Bank 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 Optima Bank and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima bank SA and Aegean Airlines SA, you can compare the effects of market volatilities on Optima Bank 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 Optima Bank with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Bank and Aegean Airlines.
Diversification Opportunities for Optima Bank and Aegean Airlines
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Optima and Aegean is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Optima bank SA 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 Optima Bank 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 Optima bank SA 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 Optima Bank i.e., Optima Bank and Aegean Airlines go up and down completely randomly.
Pair Corralation between Optima Bank and Aegean Airlines
Assuming the 90 days trading horizon Optima bank SA is expected to generate 0.75 times more return on investment than Aegean Airlines. However, Optima bank SA is 1.34 times less risky than Aegean Airlines. It trades about 0.03 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.15 per unit of risk. If you would invest 1,262 in Optima bank SA on August 30, 2024 and sell it today you would earn a total of 8.00 from holding Optima bank SA or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima bank SA vs. Aegean Airlines SA
Performance |
| Timeline |
| Optima bank SA |
| Aegean Airlines SA |
Optima Bank and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Bank and Aegean Airlines
The main advantage of trading using opposite Optima Bank and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Bank 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.| Optima Bank vs. Coca Cola HBC AG | Optima Bank vs. Hellenic Telecommunications Organization | Optima Bank vs. Greek Organization of | Optima Bank vs. Eurobank Ergasias Services |
| Aegean Airlines vs. Mytilineos SA | Aegean Airlines vs. Greek Organization of | Aegean Airlines vs. Motor Oil Corinth | Aegean Airlines vs. Alpha Services and |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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