Correlation Between Aegean Airlines and GameStop Corp

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Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and GameStop Corp 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 GameStop Corp 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 GameStop Corp, you can compare the effects of market volatilities on Aegean Airlines and GameStop Corp 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 GameStop Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and GameStop Corp.

Diversification Opportunities for Aegean Airlines and GameStop Corp

AegeanGameStopDiversified AwayAegeanGameStopDiversified Away100%
0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Aegean and GameStop is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop 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 SA are associated (or correlated) with GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and GameStop Corp go up and down completely randomly.

Pair Corralation between Aegean Airlines and GameStop Corp

Assuming the 90 days horizon Aegean Airlines is expected to generate 3.03 times less return on investment than GameStop Corp. But when comparing it to its historical volatility, Aegean Airlines SA is 3.28 times less risky than GameStop Corp. It trades about 0.05 of its potential returns per unit of risk. GameStop Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,703  in GameStop Corp on November 20, 2024 and sell it today you would earn a total of  858.00  from holding GameStop Corp or generate 50.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Aegean Airlines SA  vs.  GameStop Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10010203040
JavaScript chart by amCharts 3.21.1532A GS2C
       Timeline  
Aegean Airlines SA 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Aegean Airlines SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Aegean Airlines reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb9.51010.5
GameStop Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days GameStop Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GameStop Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2426283032

Aegean Airlines and GameStop Corp Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.18-4.63-3.08-1.530.01.553.154.756.357.95 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.1532A GS2C
       Returns  

Pair Trading with Aegean Airlines and GameStop Corp

The main advantage of trading using opposite Aegean Airlines and GameStop Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, GameStop Corp 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 GameStop Corp will offset losses from the drop in GameStop Corp's long position.
The idea behind Aegean Airlines SA and GameStop Corp 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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