Correlation Between AEGEAN AIRLINES and TOMBADOR IRON

Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and TOMBADOR IRON 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 TOMBADOR IRON into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AEGEAN AIRLINES and TOMBADOR IRON LTD, you can compare the effects of market volatilities on AEGEAN AIRLINES and TOMBADOR IRON 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 TOMBADOR IRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and TOMBADOR IRON.

Diversification Opportunities for AEGEAN AIRLINES and TOMBADOR IRON

0.0

Correlation Coefficient

AEGEAN AIRLINES  TOMBADOR IRON

Pay attention - limited upside

The 3 months correlation between AEGEAN and TOMBADOR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and TOMBADOR IRON LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOMBADOR IRON LTD 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 are associated (or correlated) with TOMBADOR IRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOMBADOR IRON LTD has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and TOMBADOR IRON go up and down completely randomly.

Pair Corralation between AEGEAN AIRLINES and TOMBADOR IRON

If you would invest  960.00  in AEGEAN AIRLINES on October 6, 2024 and sell it today you would earn a total of  43.00  from holding AEGEAN AIRLINES or generate 4.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AEGEAN AIRLINES  vs.  TOMBADOR IRON LTD

AEGEAN AIRLINES

Risk-Adjusted Performance

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Very Weak

Over the last 90 days AEGEAN AIRLINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, AEGEAN AIRLINES is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

TOMBADOR IRON LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOMBADOR IRON LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TOMBADOR IRON is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AEGEAN AIRLINES and TOMBADOR IRON

The main advantage of trading using opposite AEGEAN AIRLINES and TOMBADOR IRON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, TOMBADOR IRON 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 TOMBADOR IRON will offset losses from the drop in TOMBADOR IRON's long position.

The idea behind AEGEAN AIRLINES and TOMBADOR IRON LTD 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.