Correlation Between AEGEAN AIRLINES and SILICON LABORATOR

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

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

Diversification Opportunities for AEGEAN AIRLINES and SILICON LABORATOR

0.62

Correlation Coefficient

AEGEAN AIRLINES  SILICON LABORATOR

Poor diversification

The 3 months correlation between AEGEAN and SILICON is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and SILICON LABORATOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILICON LABORATOR 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 SILICON LABORATOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILICON LABORATOR has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and SILICON LABORATOR go up and down completely randomly.

Pair Corralation between AEGEAN AIRLINES and SILICON LABORATOR

Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 0.73 times more return on investment than SILICON LABORATOR. However, AEGEAN AIRLINES is 1.38 times less risky than SILICON LABORATOR. It trades about 0.06 of its potential returns per unit of risk. SILICON LABORATOR is currently generating about 0.0 per unit of risk. If you would invest  615.00  in AEGEAN AIRLINES on October 26, 2024 and sell it today you would earn a total of  439.00  from holding AEGEAN AIRLINES or generate 71.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

AEGEAN AIRLINES  vs.  SILICON LABORATOR

AEGEAN AIRLINES

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AEGEAN AIRLINES are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, AEGEAN AIRLINES may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SILICON LABORATOR

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SILICON LABORATOR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SILICON LABORATOR unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AEGEAN AIRLINES and SILICON LABORATOR

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

The idea behind AEGEAN AIRLINES and SILICON LABORATOR 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.