Correlation Between Aegean Airlines and Balchem
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Balchem 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 Balchem 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 Balchem, you can compare the effects of market volatilities on Aegean Airlines and Balchem 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 Balchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Balchem.
Diversification Opportunities for Aegean Airlines and Balchem
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aegean and Balchem is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Balchem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balchem 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 Balchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balchem has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Balchem go up and down completely randomly.
Pair Corralation between Aegean Airlines and Balchem
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Balchem. In addition to that, Aegean Airlines is 1.44 times more volatile than Balchem. It trades about -0.22 of its total potential returns per unit of risk. Balchem is currently generating about 0.2 per unit of volatility. If you would invest 17,079 in Balchem on August 28, 2024 and sell it today you would earn a total of 1,190 from holding Balchem or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aegean Airlines SA vs. Balchem
Performance |
| Timeline |
| Aegean Airlines SA |
| Balchem |
Aegean Airlines and Balchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Balchem
The main advantage of trading using opposite Aegean Airlines and Balchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Balchem 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 Balchem will offset losses from the drop in Balchem's long position.| Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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