Correlation Between Aegean Airlines and Bank of Greece

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

Diversification Opportunities for Aegean Airlines and Bank of Greece

0.8

Correlation Coefficient

Aegean Airlines  Bank of Greece

Very poor diversification

The 3 months correlation between Aegean and Bank is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Bank of Greece in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Greece 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 Bank of Greece. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Greece has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Bank of Greece go up and down completely randomly.

Pair Corralation between Aegean Airlines and Bank of Greece

Assuming the 90 days trading horizon Aegean Airlines SA is expected to generate 1.59 times more return on investment than Bank of Greece. However, Aegean Airlines is 1.59 times more volatile than Bank of Greece. It trades about 0.05 of its potential returns per unit of risk. Bank of Greece is currently generating about 0.08 per unit of risk. If you would invest  976.00  in Aegean Airlines SA on September 5, 2024 and sell it today you would earn a total of  14.00  from holding Aegean Airlines SA or generate 1.43% return on investment over 90 days.

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

Aegean Airlines SA  vs.  Bank of Greece

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Bank of Greece

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank of Greece has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bank of Greece is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aegean Airlines and Bank of Greece

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

The idea behind Aegean Airlines SA and Bank of Greece 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.