Correlation Between Aegean Airlines and Marfin Investment

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

Diversification Opportunities for Aegean Airlines and Marfin Investment

0.72

Correlation Coefficient

Aegean Airlines  Marfin Investment

Poor diversification

The 3 months correlation between Aegean and Marfin is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Marfin Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfin Investment 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 Marfin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfin Investment has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Marfin Investment go up and down completely randomly.

Pair Corralation between Aegean Airlines and Marfin Investment

Assuming the 90 days trading horizon Aegean Airlines SA is expected to generate 0.67 times more return on investment than Marfin Investment. However, Aegean Airlines SA is 1.49 times less risky than Marfin Investment. It trades about -0.07 of its potential returns per unit of risk. Marfin Investment Group is currently generating about -0.09 per unit of risk. If you would invest  1,075  in Aegean Airlines SA on September 12, 2024 and sell it today you would lose (74.00) from holding Aegean Airlines SA or give up 6.88% of portfolio value over 90 days.

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

Aegean Airlines SA  vs.  Marfin Investment Group

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. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Marfin Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marfin Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Aegean Airlines and Marfin Investment

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

The idea behind Aegean Airlines SA and Marfin Investment Group 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.