Correlation Between Aegean Airlines and Adams Resources
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Adams Resources 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 Adams Resources 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 Adams Resources Energy, you can compare the effects of market volatilities on Aegean Airlines and Adams Resources 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 Adams Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Adams Resources.
Diversification Opportunities for Aegean Airlines and Adams Resources
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aegean and Adams is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Adams Resources Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adams Resources Energy 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 Adams Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adams Resources Energy has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Adams Resources go up and down completely randomly.
Pair Corralation between Aegean Airlines and Adams Resources
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Adams Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 3.43 times less risky than Adams Resources. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Adams Resources Energy is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,695 in Adams Resources Energy on August 28, 2024 and sell it today you would earn a total of 1,045 from holding Adams Resources Energy or generate 38.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. Adams Resources Energy
Performance |
| Timeline |
| Aegean Airlines SA |
| Adams Resources Energy |
Aegean Airlines and Adams Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Adams Resources
The main advantage of trading using opposite Aegean Airlines and Adams Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Adams Resources 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 Adams Resources will offset losses from the drop in Adams Resources' long position.| Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
| Adams Resources vs. Delek Energy | Adams Resources vs. Crossamerica Partners LP | Adams Resources vs. Valvoline | Adams Resources vs. Star Gas Partners |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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