Correlation Between AEGEAN AIRLINES and JABIL CIRCUIT

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

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

Diversification Opportunities for AEGEAN AIRLINES and JABIL CIRCUIT

-0.39

Correlation Coefficient

AEGEAN AIRLINES  JABIL CIRCUIT

Very good diversification

The 3 months correlation between AEGEAN and JABIL is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and JABIL CIRCUIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JABIL CIRCUIT 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 JABIL CIRCUIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JABIL CIRCUIT has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and JABIL CIRCUIT go up and down completely randomly.

Pair Corralation between AEGEAN AIRLINES and JABIL CIRCUIT

Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 0.78 times more return on investment than JABIL CIRCUIT. However, AEGEAN AIRLINES is 1.28 times less risky than JABIL CIRCUIT. It trades about 0.21 of its potential returns per unit of risk. JABIL CIRCUIT is currently generating about -0.01 per unit of risk. If you would invest  982.00  in AEGEAN AIRLINES on December 27, 2024 and sell it today you would earn a total of  223.00  from holding AEGEAN AIRLINES or generate 22.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

AEGEAN AIRLINES  vs.  JABIL CIRCUIT

AEGEAN AIRLINES

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AEGEAN AIRLINES are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, AEGEAN AIRLINES exhibited solid returns over the last few months and may actually be approaching a breakup point.

JABIL CIRCUIT

Risk-Adjusted Performance

Very Weak

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

Pair Trading with AEGEAN AIRLINES and JABIL CIRCUIT

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

The idea behind AEGEAN AIRLINES and JABIL CIRCUIT 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.