Correlation Between Aegean Airlines and Athens General
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Athens General 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 Athens General 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 Athens General Composite, you can compare the effects of market volatilities on Aegean Airlines and Athens General 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 Athens General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Athens General.
Diversification Opportunities for Aegean Airlines and Athens General
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aegean and Athens is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Athens General Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athens General Composite 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 Athens General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athens General Composite has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Athens General go up and down completely randomly.
Pair Corralation between Aegean Airlines and Athens General
Assuming the 90 days trading horizon Aegean Airlines SA is expected to under-perform the Athens General. In addition to that, Aegean Airlines is 1.87 times more volatile than Athens General Composite. It trades about -0.14 of its total potential returns per unit of risk. Athens General Composite is currently generating about 0.02 per unit of volatility. If you would invest 139,049 in Athens General Composite on September 2, 2024 and sell it today you would earn a total of 300.00 from holding Athens General Composite or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. Athens General Composite
Performance |
| Timeline |
Aegean Airlines and Athens General Volatility Contrast
Predicted Return Density |
| Returns |
Aegean Airlines SA
Pair trading matchups for Aegean Airlines
Athens General Composite
Pair trading matchups for Athens General
Pair Trading with Aegean Airlines and Athens General
The main advantage of trading using opposite Aegean Airlines and Athens General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Athens General 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 Athens General will offset losses from the drop in Athens General's long position.| Aegean Airlines vs. Mytilineos SA | Aegean Airlines vs. Greek Organization of | Aegean Airlines vs. Motor Oil Corinth | Aegean Airlines vs. Alpha Services and |
| Athens General vs. Foodlink AE | Athens General vs. General Commercial Industrial | Athens General vs. CPI Computer Peripherals | Athens General vs. Optima bank SA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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