Correlation Between Aegean Airlines and Gol Intelligent

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

Diversification Opportunities for Aegean Airlines and Gol Intelligent

0.0

Correlation Coefficient

Aegean Airlines  Gol Intelligent

Pay attention - limited upside

The 3 months correlation between Aegean and Gol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Gol Intelligent Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gol Intelligent Airlines 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 Gol Intelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gol Intelligent Airlines has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Gol Intelligent go up and down completely randomly.

Pair Corralation between Aegean Airlines and Gol Intelligent

If you would invest  991.00  in Aegean Airlines SA on December 29, 2024 and sell it today you would earn a total of  234.00  from holding Aegean Airlines SA or generate 23.61% return on investment over 90 days.

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

Aegean Airlines SA  vs.  Gol Intelligent Airlines

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 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Aegean Airlines reported solid returns over the last few months and may actually be approaching a breakup point.

Gol Intelligent Airlines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gol Intelligent Airlines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Gol Intelligent is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aegean Airlines and Gol Intelligent

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

The idea behind Aegean Airlines SA and Gol Intelligent Airlines 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.