Correlation Between Wendys and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Wendys 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 Wendys and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Wendys Co and Aegean Airlines SA, you can compare the effects of market volatilities on Wendys 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 Wendys with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wendys and Aegean Airlines.
Diversification Opportunities for Wendys and Aegean Airlines
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wendys and Aegean is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding The Wendys Co 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 Wendys 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 The Wendys Co 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 Wendys i.e., Wendys and Aegean Airlines go up and down completely randomly.
Pair Corralation between Wendys and Aegean Airlines
Considering the 90-day investment horizon The Wendys Co is expected to generate 1.01 times more return on investment than Aegean Airlines. However, Wendys is 1.01 times more volatile than Aegean Airlines SA. It trades about 0.05 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.12 per unit of risk. If you would invest 1,660 in The Wendys Co on September 3, 2024 and sell it today you would earn a total of 176.00 from holding The Wendys Co or generate 10.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
The Wendys Co vs. Aegean Airlines SA
Performance |
| Timeline |
| The Wendys |
| Aegean Airlines SA |
Wendys and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wendys and Aegean Airlines
The main advantage of trading using opposite Wendys and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wendys 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.| Wendys vs. Highway Holdings Limited | Wendys vs. QCR Holdings | Wendys vs. Partner Communications | Wendys vs. Acumen Pharmaceuticals |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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