Correlation Between Aegean Airlines and Watsco
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Watsco 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 Watsco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegean Airlines SA and Watsco Inc, you can compare the effects of market volatilities on Aegean Airlines and Watsco 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 Watsco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Watsco.
Diversification Opportunities for Aegean Airlines and Watsco
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aegean and Watsco is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Watsco Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Watsco Inc 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 SA are associated (or correlated) with Watsco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Watsco Inc has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Watsco go up and down completely randomly.
Pair Corralation between Aegean Airlines and Watsco
Assuming the 90 days horizon Aegean Airlines is expected to generate 1.44 times less return on investment than Watsco. In addition to that, Aegean Airlines is 1.26 times more volatile than Watsco Inc. It trades about 0.04 of its total potential returns per unit of risk. Watsco Inc is currently generating about 0.07 per unit of volatility. If you would invest 32,450 in Watsco Inc on September 25, 2024 and sell it today you would earn a total of 16,537 from holding Watsco Inc or generate 50.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aegean Airlines SA vs. Watsco Inc
Performance |
Timeline |
Aegean Airlines SA |
Watsco Inc |
Aegean Airlines and Watsco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aegean Airlines and Watsco
The main advantage of trading using opposite Aegean Airlines and Watsco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Watsco 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 Watsco will offset losses from the drop in Watsco's long position.Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
Watsco vs. Fastenal Company | Watsco vs. SiteOne Landscape Supply | Watsco vs. Ferguson Plc | Watsco vs. WW Grainger |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume |