Correlation Between Aegean Airlines and Shake Shack
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Shake Shack 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 Shake Shack 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 Shake Shack, you can compare the effects of market volatilities on Aegean Airlines and Shake Shack 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 Shake Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Shake Shack.
Diversification Opportunities for Aegean Airlines and Shake Shack
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aegean and Shake is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Shake Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shake Shack 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 Shake Shack. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shake Shack has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Shake Shack go up and down completely randomly.
Pair Corralation between Aegean Airlines and Shake Shack
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Shake Shack. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 1.05 times less risky than Shake Shack. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Shake Shack is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 12,410 in Shake Shack on September 2, 2024 and sell it today you would earn a total of 963.00 from holding Shake Shack or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aegean Airlines SA vs. Shake Shack
Performance |
| Timeline |
| Aegean Airlines SA |
| Shake Shack |
Aegean Airlines and Shake Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Shake Shack
The main advantage of trading using opposite Aegean Airlines and Shake Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Shake Shack 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 Shake Shack will offset losses from the drop in Shake Shack's long position.| Aegean Airlines vs. Legacy Education | Aegean Airlines vs. Apple Inc | Aegean Airlines vs. NVIDIA | Aegean Airlines vs. Microsoft |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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