Correlation Between Tyson Foods and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Tyson Foods 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 Tyson Foods and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Aegean Airlines SA, you can compare the effects of market volatilities on Tyson Foods 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 Tyson Foods with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Aegean Airlines.
Diversification Opportunities for Tyson Foods and Aegean Airlines
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tyson and Aegean is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods 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 Tyson Foods 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 Tyson Foods 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 Tyson Foods i.e., Tyson Foods and Aegean Airlines go up and down completely randomly.
Pair Corralation between Tyson Foods and Aegean Airlines
Assuming the 90 days trading horizon Tyson Foods is expected to under-perform the Aegean Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Tyson Foods is 1.02 times less risky than Aegean Airlines. The stock trades about -0.08 of its potential returns per unit of risk. The Aegean Airlines SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,022 in Aegean Airlines SA on November 7, 2024 and sell it today you would earn a total of 1.00 from holding Aegean Airlines SA or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. Aegean Airlines SA
Performance |
| Timeline |
| Tyson Foods |
| Aegean Airlines SA |
Tyson Foods and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Aegean Airlines
The main advantage of trading using opposite Tyson Foods and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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.| Tyson Foods vs. Nok Airlines PCL | Tyson Foods vs. Cal Maine Foods | Tyson Foods vs. US FOODS HOLDING | Tyson Foods vs. Gol Intelligent Airlines |
| Aegean Airlines vs. MAGNUM MINING EXP | Aegean Airlines vs. STGEORGE MINING LTD | Aegean Airlines vs. Kingdee International Software | Aegean Airlines vs. Check Point Software |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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