Correlation Between Aegean Airlines and Piraeus Financial
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Piraeus Financial 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 Piraeus Financial 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 Piraeus Financial Holdings, you can compare the effects of market volatilities on Aegean Airlines and Piraeus Financial 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 Piraeus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Piraeus Financial.
Diversification Opportunities for Aegean Airlines and Piraeus Financial
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aegean and Piraeus is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Piraeus Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Financial 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 Piraeus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Financial has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Piraeus Financial go up and down completely randomly.
Pair Corralation between Aegean Airlines and Piraeus Financial
Assuming the 90 days trading horizon Aegean Airlines SA is expected to under-perform the Piraeus Financial. But the stock apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 1.14 times less risky than Piraeus Financial. The stock trades about -0.04 of its potential returns per unit of risk. The Piraeus Financial Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 317.00 in Piraeus Financial Holdings on August 27, 2024 and sell it today you would earn a total of 42.00 from holding Piraeus Financial Holdings or generate 13.25% 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. Piraeus Financial Holdings
Performance |
| Timeline |
| Aegean Airlines SA |
| Piraeus Financial |
Aegean Airlines and Piraeus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Piraeus Financial
The main advantage of trading using opposite Aegean Airlines and Piraeus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Piraeus Financial 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 Piraeus Financial will offset losses from the drop in Piraeus Financial'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 |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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