Correlation Between Aegean Airlines and Titan Cement

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

Diversification Opportunities for Aegean Airlines and Titan Cement

-0.09

Correlation Coefficient

Aegean Airlines  Titan Cement

Good diversification

The 3 months correlation between Aegean and Titan is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Titan Cement International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Cement Interna 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 Titan Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Cement Interna has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Titan Cement go up and down completely randomly.

Pair Corralation between Aegean Airlines and Titan Cement

Assuming the 90 days trading horizon Aegean Airlines is expected to generate 1.76 times less return on investment than Titan Cement. In addition to that, Aegean Airlines is 1.24 times more volatile than Titan Cement International. It trades about 0.07 of its total potential returns per unit of risk. Titan Cement International is currently generating about 0.15 per unit of volatility. If you would invest  1,309  in Titan Cement International on October 11, 2024 and sell it today you would earn a total of  2,661  from holding Titan Cement International or generate 203.28% return on investment over 90 days.

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

Aegean Airlines SA  vs.  Titan Cement International

Aegean Airlines SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aegean Airlines SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Aegean Airlines is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Titan Cement Interna

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Titan Cement International are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Titan Cement unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aegean Airlines and Titan Cement

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

The idea behind Aegean Airlines SA and Titan Cement International 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..