Correlation Between Aegean Airlines and MAG Silver

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

Diversification Opportunities for Aegean Airlines and MAG Silver

-0.11

Correlation Coefficient

Aegean Airlines  MAG Silver

Good diversification

The 3 months correlation between Aegean and MAG is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and MAG Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG Silver Corp 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 MAG Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG Silver Corp has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and MAG Silver go up and down completely randomly.

Pair Corralation between Aegean Airlines and MAG Silver

Assuming the 90 days horizon Aegean Airlines SA is expected to generate 0.67 times more return on investment than MAG Silver. However, Aegean Airlines SA is 1.48 times less risky than MAG Silver. It trades about 0.07 of its potential returns per unit of risk. MAG Silver Corp is currently generating about -0.05 per unit of risk. If you would invest  1,010  in Aegean Airlines SA on October 26, 2024 and sell it today you would earn a total of  73.00  from holding Aegean Airlines SA or generate 7.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Aegean Airlines SA  vs.  MAG Silver Corp

Aegean Airlines SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aegean Airlines SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Aegean Airlines may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MAG Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAG Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Aegean Airlines and MAG Silver

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

The idea behind Aegean Airlines SA and MAG Silver Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.