Correlation Between Suntory Beverage and AEGEAN AIRLINES

Can any of the company-specific risk be diversified away by investing in both Suntory Beverage and AEGEAN AIRLINES 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 Suntory Beverage and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Suntory Beverage Food and AEGEAN AIRLINES, you can compare the effects of market volatilities on Suntory Beverage and AEGEAN AIRLINES 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 Suntory Beverage with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and AEGEAN AIRLINES.

Diversification Opportunities for Suntory Beverage and AEGEAN AIRLINES

0.63

Correlation Coefficient

Suntory Beverage  AEGEAN AIRLINES

Poor diversification

The 3 months correlation between Suntory and AEGEAN is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and Suntory Beverage 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 Suntory Beverage Food are associated (or correlated) with AEGEAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEGEAN AIRLINES has no effect on the direction of Suntory Beverage i.e., Suntory Beverage and AEGEAN AIRLINES go up and down completely randomly.

Pair Corralation between Suntory Beverage and AEGEAN AIRLINES

Assuming the 90 days horizon Suntory Beverage Food is expected to under-perform the AEGEAN AIRLINES. In addition to that, Suntory Beverage is 1.1 times more volatile than AEGEAN AIRLINES. It trades about -0.32 of its total potential returns per unit of risk. AEGEAN AIRLINES is currently generating about 0.21 per unit of volatility. If you would invest  951.00  in AEGEAN AIRLINES on October 4, 2024 and sell it today you would earn a total of  42.00  from holding AEGEAN AIRLINES or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Suntory Beverage Food  vs.  AEGEAN AIRLINES

Suntory Beverage Food

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Suntory Beverage Food has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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.

AEGEAN AIRLINES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEGEAN AIRLINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, AEGEAN AIRLINES is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Suntory Beverage and AEGEAN AIRLINES

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

The idea behind Suntory Beverage Food and AEGEAN 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.