Correlation Between Aegean Airlines and Stanley Black

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

Diversification Opportunities for Aegean Airlines and Stanley Black

0.13

Correlation Coefficient

Aegean Airlines  Stanley Black

Average diversification

The 3 months correlation between Aegean and Stanley is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Stanley Black Decker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Black Decker 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 Stanley Black. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Black Decker has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Stanley Black go up and down completely randomly.

Pair Corralation between Aegean Airlines and Stanley Black

Assuming the 90 days horizon Aegean Airlines SA is expected to generate 1.12 times more return on investment than Stanley Black. However, Aegean Airlines is 1.12 times more volatile than Stanley Black Decker. It trades about 0.14 of its potential returns per unit of risk. Stanley Black Decker is currently generating about 0.0 per unit of risk. If you would invest  1,006  in Aegean Airlines SA on December 20, 2024 and sell it today you would earn a total of  174.00  from holding Aegean Airlines SA or generate 17.3% return on investment over 90 days.

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

Aegean Airlines SA  vs.  Stanley Black Decker

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 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.

Stanley Black Decker

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Aegean Airlines and Stanley Black

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

The idea behind Aegean Airlines SA and Stanley Black Decker 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.