Correlation Between Athens General and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Athens General and Aegean Airlines 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 Athens General and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athens General Composite and Aegean Airlines SA, you can compare the effects of market volatilities on Athens General and Aegean Airlines 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 Athens General with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athens General and Aegean Airlines.
Diversification Opportunities for Athens General and Aegean Airlines
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Athens and Aegean is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Athens General Composite and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA and Athens General 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 Athens General Composite are associated (or correlated) with Aegean Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegean Airlines SA has no effect on the direction of Athens General i.e., Athens General and Aegean Airlines go up and down completely randomly.
Pair Corralation between Athens General and Aegean Airlines
Assuming the 90 days trading horizon Athens General Composite is expected to generate 0.61 times more return on investment than Aegean Airlines. However, Athens General Composite is 1.65 times less risky than Aegean Airlines. It trades about -0.03 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.25 per unit of risk. If you would invest 140,714 in Athens General Composite on August 24, 2024 and sell it today you would lose (951.00) from holding Athens General Composite or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athens General Composite vs. Aegean Airlines SA
Performance |
| Timeline |
Athens General and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Athens General Composite
Pair trading matchups for Athens General
Aegean Airlines SA
Pair trading matchups for Aegean Airlines
Pair Trading with Athens General and Aegean Airlines
The main advantage of trading using opposite Athens General and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athens General position performs unexpectedly, Aegean Airlines 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 Aegean Airlines will offset losses from the drop in Aegean Airlines' long position.| Athens General vs. Intracom Constructions Societe | Athens General vs. Thrace Plastics Holding | Athens General vs. Logismos Information Systems | Athens General vs. Elvalhalcor Hellenic Copper |
| Aegean Airlines vs. Mytilineos SA | Aegean Airlines vs. Greek Organization of | Aegean Airlines vs. Motor Oil Corinth | Aegean Airlines vs. Alpha Services and |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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