Correlation Between Victorias Secret and Aegean Airlines

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Can any of the company-specific risk be diversified away by investing in both Victorias Secret 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 Victorias Secret and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victorias Secret Co and Aegean Airlines SA, you can compare the effects of market volatilities on Victorias Secret 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 Victorias Secret with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and Aegean Airlines.

Diversification Opportunities for Victorias Secret and Aegean Airlines

VictoriasAegeanDiversified AwayVictoriasAegeanDiversified Away100%
-0.87
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Victorias and Aegean is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co 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 Victorias Secret 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 Victorias Secret Co 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 Victorias Secret i.e., Victorias Secret and Aegean Airlines go up and down completely randomly.

Pair Corralation between Victorias Secret and Aegean Airlines

Given the investment horizon of 90 days Victorias Secret is expected to generate 1.18 times less return on investment than Aegean Airlines. In addition to that, Victorias Secret is 1.66 times more volatile than Aegean Airlines SA. It trades about 0.04 of its total potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.07 per unit of volatility. If you would invest  512.00  in Aegean Airlines SA on September 23, 2024 and sell it today you would earn a total of  513.00  from holding Aegean Airlines SA or generate 100.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy99.8%
ValuesDaily Returns

Victorias Secret Co  vs.  Aegean Airlines SA

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 020406080
JavaScript chart by amCharts 3.21.15VSCO AGZNF
       Timeline  
Victorias Secret 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Victorias Secret Co are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Victorias Secret displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2530354045
Aegean Airlines SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aegean Airlines SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec10.51111.51212.51313.51414.5

Victorias Secret and Aegean Airlines Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.56-7.16-4.76-2.360.02.75.468.2110.96 0.050.100.15
JavaScript chart by amCharts 3.21.15VSCO AGZNF
       Returns  

Pair Trading with Victorias Secret and Aegean Airlines

The main advantage of trading using opposite Victorias Secret and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret 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.
The idea behind Victorias Secret Co and Aegean Airlines SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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