Correlation Between Aegean Airlines and Foodlink
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Foodlink 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 Foodlink 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 Foodlink AE, you can compare the effects of market volatilities on Aegean Airlines and Foodlink 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 Foodlink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Foodlink.
Diversification Opportunities for Aegean Airlines and Foodlink
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aegean and Foodlink is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Foodlink AE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodlink AE 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 Foodlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodlink AE has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Foodlink go up and down completely randomly.
Pair Corralation between Aegean Airlines and Foodlink
Assuming the 90 days trading horizon Aegean Airlines SA is expected to generate 0.6 times more return on investment than Foodlink. However, Aegean Airlines SA is 1.68 times less risky than Foodlink. It trades about 0.05 of its potential returns per unit of risk. Foodlink AE is currently generating about 0.0 per unit of risk. If you would invest 741.00 in Aegean Airlines SA on November 9, 2024 and sell it today you would earn a total of 299.00 from holding Aegean Airlines SA or generate 40.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.76% |
| Values | Daily Returns |
Aegean Airlines SA vs. Foodlink AE
Performance |
| Timeline |
| Aegean Airlines SA |
| Foodlink AE |
Aegean Airlines and Foodlink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Foodlink
The main advantage of trading using opposite Aegean Airlines and Foodlink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Foodlink 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 Foodlink will offset losses from the drop in Foodlink'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 |
| Foodlink vs. Frigoglass SAIC | Foodlink vs. Autohellas SA | Foodlink vs. Public Power | Foodlink vs. Intralot SA Integrated |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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