Correlation Between Aegean Airlines and Piraeus Port

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

Diversification Opportunities for Aegean Airlines and Piraeus Port

0.79

Correlation Coefficient

Aegean Airlines  Piraeus Port

Poor diversification

The 3 months correlation between Aegean and Piraeus is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Piraeus Port Authority in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Port Authority 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 Piraeus Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Port Authority has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Piraeus Port go up and down completely randomly.

Pair Corralation between Aegean Airlines and Piraeus Port

Assuming the 90 days trading horizon Aegean Airlines SA is expected to generate 0.99 times more return on investment than Piraeus Port. However, Aegean Airlines SA is 1.01 times less risky than Piraeus Port. It trades about 0.21 of its potential returns per unit of risk. Piraeus Port Authority is currently generating about 0.17 per unit of risk. If you would invest  1,001  in Aegean Airlines SA on December 30, 2024 and sell it today you would earn a total of  227.00  from holding Aegean Airlines SA or generate 22.68% return on investment over 90 days.

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

Aegean Airlines SA  vs.  Piraeus Port Authority

Aegean Airlines SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aegean Airlines SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Aegean Airlines unveiled solid returns over the last few months and may actually be approaching a breakup point.

Piraeus Port Authority

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Piraeus Port Authority are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Piraeus Port unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aegean Airlines and Piraeus Port

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

The idea behind Aegean Airlines SA and Piraeus Port Authority 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.