Correlation Between Aegean Airlines and TEXAS ROADHOUSE

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

Diversification Opportunities for Aegean Airlines and TEXAS ROADHOUSE

-0.86

Correlation Coefficient

Aegean Airlines  TEXAS ROADHOUSE

Pay attention - limited upside

The 3 months correlation between Aegean and TEXAS is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and TEXAS ROADHOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEXAS ROADHOUSE 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 TEXAS ROADHOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEXAS ROADHOUSE has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and TEXAS ROADHOUSE go up and down completely randomly.

Pair Corralation between Aegean Airlines and TEXAS ROADHOUSE

Assuming the 90 days horizon Aegean Airlines SA is expected to generate 1.07 times more return on investment than TEXAS ROADHOUSE. However, Aegean Airlines is 1.07 times more volatile than TEXAS ROADHOUSE. It trades about 0.22 of its potential returns per unit of risk. TEXAS ROADHOUSE is currently generating about -0.14 per unit of risk. If you would invest  939.00  in Aegean Airlines SA on September 19, 2024 and sell it today you would earn a total of  79.00  from holding Aegean Airlines SA or generate 8.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Aegean Airlines SA  vs.  TEXAS ROADHOUSE

Aegean Airlines SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aegean Airlines SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Aegean Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

TEXAS ROADHOUSE

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TEXAS ROADHOUSE are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, TEXAS ROADHOUSE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aegean Airlines and TEXAS ROADHOUSE

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

The idea behind Aegean Airlines SA and TEXAS ROADHOUSE 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.