Correlation Between Hellenic Petroleum and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Hellenic Petroleum 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 Hellenic Petroleum and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hellenic Petroleum SA and Aegean Airlines SA, you can compare the effects of market volatilities on Hellenic Petroleum 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 Hellenic Petroleum with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hellenic Petroleum and Aegean Airlines.
Diversification Opportunities for Hellenic Petroleum and Aegean Airlines
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hellenic and Aegean is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hellenic Petroleum SA 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 Hellenic Petroleum 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 Hellenic Petroleum SA 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 Hellenic Petroleum i.e., Hellenic Petroleum and Aegean Airlines go up and down completely randomly.
Pair Corralation between Hellenic Petroleum and Aegean Airlines
Assuming the 90 days trading horizon Hellenic Petroleum SA is expected to generate 0.95 times more return on investment than Aegean Airlines. However, Hellenic Petroleum SA is 1.05 times less risky than Aegean Airlines. It trades about 0.02 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.09 per unit of risk. If you would invest 672.00 in Hellenic Petroleum SA on August 31, 2024 and sell it today you would earn a total of 3.00 from holding Hellenic Petroleum SA or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hellenic Petroleum SA vs. Aegean Airlines SA
Performance |
| Timeline |
| Hellenic Petroleum |
| Aegean Airlines SA |
Hellenic Petroleum and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hellenic Petroleum and Aegean Airlines
The main advantage of trading using opposite Hellenic Petroleum and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hellenic Petroleum 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.| Hellenic Petroleum vs. Motor Oil Corinth | Hellenic Petroleum vs. Greek Organization of | Hellenic Petroleum vs. Mytilineos SA | Hellenic Petroleum vs. Hellenic Telecommunications Organization |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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