Correlation Between AEGEAN AIRLINES and Lerøy Seafood

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

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

Diversification Opportunities for AEGEAN AIRLINES and Lerøy Seafood

-0.47

Correlation Coefficient

AEGEAN AIRLINES  Lerøy Seafood

Very good diversification

The 3 months correlation between AEGEAN and Lerøy is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group 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 Lerøy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and Lerøy Seafood go up and down completely randomly.

Pair Corralation between AEGEAN AIRLINES and Lerøy Seafood

Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to under-perform the Lerøy Seafood. But the stock apears to be less risky and, when comparing its historical volatility, AEGEAN AIRLINES is 1.24 times less risky than Lerøy Seafood. The stock trades about -0.08 of its potential returns per unit of risk. The Lery Seafood Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  411.00  in Lery Seafood Group on September 14, 2024 and sell it today you would earn a total of  23.00  from holding Lery Seafood Group or generate 5.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AEGEAN AIRLINES  vs.  Lery Seafood Group

AEGEAN AIRLINES

Risk-Adjusted Performance

0 of 100

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 latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Lery Seafood Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lery Seafood Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Lerøy Seafood is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AEGEAN AIRLINES and Lerøy Seafood

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

The idea behind AEGEAN AIRLINES and Lery Seafood Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..