Correlation Between AEGEAN AIRLINES and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and InPlay Oil 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 AEGEAN AIRLINES and InPlay Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and InPlay Oil Corp, you can compare the effects of market volatilities on AEGEAN AIRLINES and InPlay Oil 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 AEGEAN AIRLINES with a short position of InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and InPlay Oil.
Diversification Opportunities for AEGEAN AIRLINES and InPlay Oil
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AEGEAN and InPlay is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp and AEGEAN AIRLINES 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 AEGEAN AIRLINES are associated (or correlated) with InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and InPlay Oil go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and InPlay Oil
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 0.57 times more return on investment than InPlay Oil. However, AEGEAN AIRLINES is 1.75 times less risky than InPlay Oil. It trades about 0.2 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about 0.02 per unit of risk. If you would invest 993.00 in AEGEAN AIRLINES on December 30, 2024 and sell it today you would earn a total of 228.00 from holding AEGEAN AIRLINES or generate 22.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AEGEAN AIRLINES vs. InPlay Oil Corp
Performance |
Timeline |
AEGEAN AIRLINES |
InPlay Oil Corp |
AEGEAN AIRLINES and InPlay Oil Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AEGEAN AIRLINES and InPlay Oil
The main advantage of trading using opposite AEGEAN AIRLINES and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, InPlay Oil 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.AEGEAN AIRLINES vs. AFRICAN MEDIA ENT | AEGEAN AIRLINES vs. Ubisoft Entertainment SA | AEGEAN AIRLINES vs. PROSIEBENSAT1 MEDIADR4 | AEGEAN AIRLINES vs. Intermediate Capital Group |
InPlay Oil vs. Marie Brizard Wine | InPlay Oil vs. FIREWEED METALS P | InPlay Oil vs. Harmony Gold Mining | InPlay Oil vs. Calibre Mining Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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