Correlation Between Playa Hotels and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Playa Hotels 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 Playa Hotels and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playa Hotels Resorts and Aegean Airlines SA, you can compare the effects of market volatilities on Playa Hotels 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 Playa Hotels with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Aegean Airlines.
Diversification Opportunities for Playa Hotels and Aegean Airlines
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Playa and Aegean is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts 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 Playa Hotels 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 Playa Hotels Resorts 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 Playa Hotels i.e., Playa Hotels and Aegean Airlines go up and down completely randomly.
Pair Corralation between Playa Hotels and Aegean Airlines
Assuming the 90 days horizon Playa Hotels Resorts is expected to generate 0.99 times more return on investment than Aegean Airlines. However, Playa Hotels Resorts is 1.01 times less risky than Aegean Airlines. It trades about 0.07 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.01 per unit of risk. If you would invest 705.00 in Playa Hotels Resorts on September 14, 2024 and sell it today you would earn a total of 270.00 from holding Playa Hotels Resorts or generate 38.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Aegean Airlines SA
Performance |
| Timeline |
| Playa Hotels Resorts |
| Aegean Airlines SA |
Playa Hotels and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Aegean Airlines
The main advantage of trading using opposite Playa Hotels and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels 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.| Playa Hotels vs. Superior Plus Corp | Playa Hotels vs. SIVERS SEMICONDUCTORS AB | Playa Hotels vs. Norsk Hydro ASA | Playa Hotels vs. Reliance Steel Aluminum |
| Aegean Airlines vs. RYANAIR HLDGS ADR | Aegean Airlines vs. Ryanair Holdings plc | Aegean Airlines vs. Superior Plus Corp | Aegean Airlines vs. SIVERS SEMICONDUCTORS AB |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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