Correlation Between EAGLE MATERIALS and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both EAGLE MATERIALS 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 EAGLE MATERIALS and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EAGLE MATERIALS and Aegean Airlines SA, you can compare the effects of market volatilities on EAGLE MATERIALS 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 EAGLE MATERIALS with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAGLE MATERIALS and Aegean Airlines.
Diversification Opportunities for EAGLE MATERIALS and Aegean Airlines
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EAGLE and Aegean is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding EAGLE MATERIALS 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 EAGLE MATERIALS 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 EAGLE MATERIALS 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 EAGLE MATERIALS i.e., EAGLE MATERIALS and Aegean Airlines go up and down completely randomly.
Pair Corralation between EAGLE MATERIALS and Aegean Airlines
Assuming the 90 days trading horizon EAGLE MATERIALS is expected to under-perform the Aegean Airlines. But the stock apears to be less risky and, when comparing its historical volatility, EAGLE MATERIALS is 1.09 times less risky than Aegean Airlines. The stock trades about -0.64 of its potential returns per unit of risk. The Aegean Airlines SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 934.00 in Aegean Airlines SA on September 23, 2024 and sell it today you would earn a total of 72.00 from holding Aegean Airlines SA or generate 7.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
EAGLE MATERIALS vs. Aegean Airlines SA
Performance |
Timeline |
EAGLE MATERIALS |
Aegean Airlines SA |
EAGLE MATERIALS and Aegean Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EAGLE MATERIALS and Aegean Airlines
The main advantage of trading using opposite EAGLE MATERIALS and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAGLE MATERIALS 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.EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc | EAGLE MATERIALS vs. Apple Inc |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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