Correlation Between Aegean Airlines and Daido Steel

Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Daido Steel 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 Daido Steel 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 Daido Steel Co, you can compare the effects of market volatilities on Aegean Airlines and Daido Steel 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 Daido Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Daido Steel.

Diversification Opportunities for Aegean Airlines and Daido Steel

0.73

Correlation Coefficient

Aegean Airlines  Daido Steel

Poor diversification

The 3 months correlation between Aegean and Daido is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Daido Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daido Steel 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 Daido Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daido Steel has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Daido Steel go up and down completely randomly.

Pair Corralation between Aegean Airlines and Daido Steel

Assuming the 90 days horizon Aegean Airlines SA is expected to generate 1.48 times more return on investment than Daido Steel. However, Aegean Airlines is 1.48 times more volatile than Daido Steel Co. It trades about 0.16 of its potential returns per unit of risk. Daido Steel Co is currently generating about 0.13 per unit of risk. If you would invest  991.00  in Aegean Airlines SA on December 28, 2024 and sell it today you would earn a total of  214.00  from holding Aegean Airlines SA or generate 21.59% 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.  Daido Steel Co

Aegean Airlines SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aegean Airlines SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Aegean Airlines reported solid returns over the last few months and may actually be approaching a breakup point.

Daido Steel

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Daido Steel Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Daido Steel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aegean Airlines and Daido Steel

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

The idea behind Aegean Airlines SA and Daido Steel Co 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.