Correlation Between Wayside Technology and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Wayside Technology 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 Wayside Technology and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wayside Technology Group and Aegean Airlines SA, you can compare the effects of market volatilities on Wayside Technology 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 Wayside Technology with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wayside Technology and Aegean Airlines.
Diversification Opportunities for Wayside Technology and Aegean Airlines
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wayside and Aegean is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Wayside Technology Group 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 Wayside Technology 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 Wayside Technology Group 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 Wayside Technology i.e., Wayside Technology and Aegean Airlines go up and down completely randomly.
Pair Corralation between Wayside Technology and Aegean Airlines
Assuming the 90 days horizon Wayside Technology Group is expected to generate 2.15 times more return on investment than Aegean Airlines. However, Wayside Technology is 2.15 times more volatile than Aegean Airlines SA. It trades about 0.47 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.19 per unit of risk. If you would invest 9,287 in Wayside Technology Group on August 28, 2024 and sell it today you would earn a total of 4,213 from holding Wayside Technology Group or generate 45.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wayside Technology Group vs. Aegean Airlines SA
Performance |
| Timeline |
| Wayside Technology |
| Aegean Airlines SA |
Wayside Technology and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wayside Technology and Aegean Airlines
The main advantage of trading using opposite Wayside Technology and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wayside Technology 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.| Wayside Technology vs. Marie Brizard Wine | Wayside Technology vs. 24SEVENOFFICE GROUP AB | Wayside Technology vs. KB HOME | Wayside Technology vs. NAKED WINES PLC |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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