Correlation Between AGF Management and AEGEAN AIRLINES

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

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

Diversification Opportunities for AGF Management and AEGEAN AIRLINES

-0.13

Correlation Coefficient

AGF Management  AEGEAN AIRLINES

Good diversification

The 3 months correlation between AGF and AEGEAN is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and AGF Management 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 AGF Management Limited 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 AGF Management i.e., AGF Management and AEGEAN AIRLINES go up and down completely randomly.

Pair Corralation between AGF Management and AEGEAN AIRLINES

Assuming the 90 days horizon AGF Management Limited is expected to under-perform the AEGEAN AIRLINES. In addition to that, AGF Management is 1.28 times more volatile than AEGEAN AIRLINES. It trades about -0.05 of its total potential returns per unit of risk. AEGEAN AIRLINES is currently generating about 0.16 per unit of volatility. If you would invest  1,006  in AEGEAN AIRLINES on December 20, 2024 and sell it today you would earn a total of  173.00  from holding AEGEAN AIRLINES or generate 17.2% return on investment over 90 days.

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

AGF Management Limited  vs.  AEGEAN AIRLINES

AGF Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days AGF Management Limited 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

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AEGEAN AIRLINES are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, AEGEAN AIRLINES exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGF Management and AEGEAN AIRLINES

The main advantage of trading using opposite AGF Management and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management 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 AGF Management Limited 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.