Correlation Between Insurance Australia and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both Insurance Australia 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 Insurance Australia and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insurance Australia Group and AEGEAN AIRLINES, you can compare the effects of market volatilities on Insurance Australia 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 Insurance Australia with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and AEGEAN AIRLINES.
Diversification Opportunities for Insurance Australia and AEGEAN AIRLINES
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Insurance and AEGEAN is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and Insurance Australia 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 Insurance Australia 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 has no effect on the direction of Insurance Australia i.e., Insurance Australia and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between Insurance Australia and AEGEAN AIRLINES
Assuming the 90 days horizon Insurance Australia Group is expected to generate 1.18 times more return on investment than AEGEAN AIRLINES. However, Insurance Australia is 1.18 times more volatile than AEGEAN AIRLINES. It trades about 0.12 of its potential returns per unit of risk. AEGEAN AIRLINES is currently generating about -0.05 per unit of risk. If you would invest 379.00 in Insurance Australia Group on September 14, 2024 and sell it today you would earn a total of 117.00 from holding Insurance Australia Group or generate 30.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Insurance Australia Group vs. AEGEAN AIRLINES
Performance |
Timeline |
Insurance Australia |
AEGEAN AIRLINES |
Insurance Australia and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Insurance Australia and AEGEAN AIRLINES
The main advantage of trading using opposite Insurance Australia and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia 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's long position.Insurance Australia vs. Superior Plus Corp | Insurance Australia vs. SIVERS SEMICONDUCTORS AB | Insurance Australia vs. CHINA HUARONG ENERHD 50 | Insurance Australia vs. NORDIC HALIBUT AS |
AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc | AEGEAN AIRLINES vs. Apple Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum |