Correlation Between Aegean Airlines and Anheuser Busch

Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Anheuser Busch 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 Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aegean Airlines SA and Anheuser Busch InBev SANV, you can compare the effects of market volatilities on Aegean Airlines and Anheuser Busch 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 Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Anheuser Busch.

Diversification Opportunities for Aegean Airlines and Anheuser Busch

0.67

Correlation Coefficient

Aegean Airlines  Anheuser Busch

Poor diversification

The 3 months correlation between Aegean and Anheuser is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Anheuser Busch InBev SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch InBev 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 SA are associated (or correlated) with Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch InBev has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Anheuser Busch go up and down completely randomly.

Pair Corralation between Aegean Airlines and Anheuser Busch

Assuming the 90 days horizon Aegean Airlines is expected to generate 1.27 times less return on investment than Anheuser Busch. In addition to that, Aegean Airlines is 1.22 times more volatile than Anheuser Busch InBev SANV. It trades about 0.13 of its total potential returns per unit of risk. Anheuser Busch InBev SANV is currently generating about 0.2 per unit of volatility. If you would invest  4,815  in Anheuser Busch InBev SANV on December 22, 2024 and sell it today you would earn a total of  1,025  from holding Anheuser Busch InBev SANV or generate 21.29% return on investment over 90 days.

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

Aegean Airlines SA  vs.  Anheuser Busch InBev SANV

Aegean Airlines SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aegean Airlines SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aegean Airlines reported solid returns over the last few months and may actually be approaching a breakup point.

Anheuser Busch InBev

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anheuser Busch InBev SANV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain primary indicators, Anheuser Busch displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aegean Airlines and Anheuser Busch

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

The idea behind Aegean Airlines SA and Anheuser Busch InBev SANV 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 Stocks Directory module to find actively traded stocks across global markets.