Correlation Between Q2M Managementberatu and AEGEAN AIRLINES

Can any of the company-specific risk be diversified away by investing in both Q2M Managementberatu 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 Q2M Managementberatu and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Q2M Managementberatung AG and AEGEAN AIRLINES, you can compare the effects of market volatilities on Q2M Managementberatu 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 Q2M Managementberatu with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2M Managementberatu and AEGEAN AIRLINES.

Diversification Opportunities for Q2M Managementberatu and AEGEAN AIRLINES

-0.55

Correlation Coefficient

Q2M Managementberatu  AEGEAN AIRLINES

Excellent diversification

The 3 months correlation between Q2M and AEGEAN is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Q2M Managementberatung AG and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and Q2M Managementberatu 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 Q2M Managementberatung AG 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 Q2M Managementberatu i.e., Q2M Managementberatu and AEGEAN AIRLINES go up and down completely randomly.

Pair Corralation between Q2M Managementberatu and AEGEAN AIRLINES

Assuming the 90 days trading horizon Q2M Managementberatung AG is expected to under-perform the AEGEAN AIRLINES. But the stock apears to be less risky and, when comparing its historical volatility, Q2M Managementberatung AG is 2.95 times less risky than AEGEAN AIRLINES. The stock trades about -0.04 of its potential returns per unit of risk. The AEGEAN AIRLINES is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  615.00  in AEGEAN AIRLINES on October 27, 2024 and sell it today you would earn a total of  439.00  from holding AEGEAN AIRLINES or generate 71.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Q2M Managementberatung AG  vs.  AEGEAN AIRLINES

Q2M Managementberatung

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Q2M Managementberatung AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

AEGEAN AIRLINES

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AEGEAN AIRLINES are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, AEGEAN AIRLINES is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Q2M Managementberatu and AEGEAN AIRLINES

The main advantage of trading using opposite Q2M Managementberatu and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2M Managementberatu 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.

The idea behind Q2M Managementberatung AG and AEGEAN AIRLINES pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.