Correlation Between NXP Semiconductors and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both NXP Semiconductors 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 NXP Semiconductors and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NXP Semiconductors NV and Aegean Airlines SA, you can compare the effects of market volatilities on NXP Semiconductors 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 NXP Semiconductors with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of NXP Semiconductors and Aegean Airlines.
Diversification Opportunities for NXP Semiconductors and Aegean Airlines
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NXP and Aegean is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NXP Semiconductors NV 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 NXP Semiconductors 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 NXP Semiconductors NV 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 NXP Semiconductors i.e., NXP Semiconductors and Aegean Airlines go up and down completely randomly.
Pair Corralation between NXP Semiconductors and Aegean Airlines
Assuming the 90 days trading horizon NXP Semiconductors NV is expected to under-perform the Aegean Airlines. In addition to that, NXP Semiconductors is 1.27 times more volatile than Aegean Airlines SA. It trades about -0.04 of its total potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.0 per unit of volatility. If you would invest 1,094 in Aegean Airlines SA on November 2, 2024 and sell it today you would lose (15.00) from holding Aegean Airlines SA or give up 1.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NXP Semiconductors NV vs. Aegean Airlines SA
Performance |
| Timeline |
| NXP Semiconductors |
| Aegean Airlines SA |
NXP Semiconductors and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NXP Semiconductors and Aegean Airlines
The main advantage of trading using opposite NXP Semiconductors and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NXP Semiconductors 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.| NXP Semiconductors vs. MPH Health Care | NXP Semiconductors vs. Chiba Bank | NXP Semiconductors vs. OPKO HEALTH | NXP Semiconductors vs. BANK OF CHINA |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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