Correlation Between Aegean Airlines and Alpha Trust

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

Diversification Opportunities for Aegean Airlines and Alpha Trust

0.12

Correlation Coefficient

Aegean Airlines  Alpha Trust

Average diversification

The 3 months correlation between Aegean and Alpha is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Alpha Trust Mutual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Trust Mutual 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 Alpha Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Trust Mutual has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Alpha Trust go up and down completely randomly.

Pair Corralation between Aegean Airlines and Alpha Trust

Assuming the 90 days trading horizon Aegean Airlines SA is expected to generate 4.89 times more return on investment than Alpha Trust. However, Aegean Airlines is 4.89 times more volatile than Alpha Trust Mutual. It trades about 0.12 of its potential returns per unit of risk. Alpha Trust Mutual is currently generating about 0.04 per unit of risk. If you would invest  970.00  in Aegean Airlines SA on December 2, 2024 and sell it today you would earn a total of  107.00  from holding Aegean Airlines SA or generate 11.03% return on investment over 90 days.

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

Aegean Airlines SA  vs.  Alpha Trust Mutual

Aegean Airlines SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aegean Airlines SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Aegean Airlines may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Alpha Trust Mutual

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Trust Mutual are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Alpha Trust is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aegean Airlines and Alpha Trust

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

The idea behind Aegean Airlines SA and Alpha Trust Mutual 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.