Correlation Between PRECISION DRILLING and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both PRECISION DRILLING 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 PRECISION DRILLING and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PRECISION DRILLING P and AEGEAN AIRLINES, you can compare the effects of market volatilities on PRECISION DRILLING 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 PRECISION DRILLING with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PRECISION DRILLING and AEGEAN AIRLINES.
Diversification Opportunities for PRECISION DRILLING and AEGEAN AIRLINES
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PRECISION and AEGEAN is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding PRECISION DRILLING P and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and PRECISION DRILLING 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 PRECISION DRILLING P 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 PRECISION DRILLING i.e., PRECISION DRILLING and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between PRECISION DRILLING and AEGEAN AIRLINES
Assuming the 90 days trading horizon PRECISION DRILLING P is expected to under-perform the AEGEAN AIRLINES. In addition to that, PRECISION DRILLING is 1.21 times more volatile than AEGEAN AIRLINES. It trades about -0.08 of its total potential returns per unit of risk. AEGEAN AIRLINES is currently generating about 0.14 per unit of volatility. If you would invest 993.00 in AEGEAN AIRLINES on November 28, 2024 and sell it today you would earn a total of 99.00 from holding AEGEAN AIRLINES or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PRECISION DRILLING P vs. AEGEAN AIRLINES
Performance |
| Timeline |
| PRECISION DRILLING |
| AEGEAN AIRLINES |
PRECISION DRILLING and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PRECISION DRILLING and AEGEAN AIRLINES
The main advantage of trading using opposite PRECISION DRILLING and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PRECISION DRILLING 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.| PRECISION DRILLING vs. Japan Tobacco | PRECISION DRILLING vs. QBE Insurance Group | PRECISION DRILLING vs. JAPAN TOBACCO UNSPADR12 | PRECISION DRILLING vs. HANOVER INSURANCE |
| AEGEAN AIRLINES vs. Computer And Technologies | AEGEAN AIRLINES vs. Data Modul AG | AEGEAN AIRLINES vs. DATANG INTL POW | AEGEAN AIRLINES vs. DOCDATA |
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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