Correlation Between Aegean Airlines and Ryanair Holdings
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Ryanair Holdings 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 Ryanair Holdings 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 Ryanair Holdings PLC, you can compare the effects of market volatilities on Aegean Airlines and Ryanair Holdings 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 Ryanair Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Ryanair Holdings.
Diversification Opportunities for Aegean Airlines and Ryanair Holdings
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aegean and Ryanair is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Ryanair Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryanair Holdings PLC 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 Ryanair Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryanair Holdings PLC has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Ryanair Holdings go up and down completely randomly.
Pair Corralation between Aegean Airlines and Ryanair Holdings
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Ryanair Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 1.5 times less risky than Ryanair Holdings. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Ryanair Holdings PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,258 in Ryanair Holdings PLC on August 28, 2024 and sell it today you would earn a total of 121.00 from holding Ryanair Holdings PLC or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. Ryanair Holdings PLC
Performance |
| Timeline |
| Aegean Airlines SA |
| Ryanair Holdings PLC |
Aegean Airlines and Ryanair Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Ryanair Holdings
The main advantage of trading using opposite Aegean Airlines and Ryanair Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Ryanair Holdings 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 Ryanair Holdings will offset losses from the drop in Ryanair Holdings' long position.| Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
| Ryanair Holdings vs. Allegiant Travel | Ryanair Holdings vs. Azul SA | Ryanair Holdings vs. Alaska Air Group | Ryanair Holdings vs. International Consolidated Airlines |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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