Correlation Between Aegean Airlines and BJs Restaurants

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

Diversification Opportunities for Aegean Airlines and BJs Restaurants

-0.43

Correlation Coefficient

Aegean Airlines  BJs Restaurants

Very good diversification

The 3 months correlation between Aegean and BJs is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants 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 BJs Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Restaurants has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and BJs Restaurants go up and down completely randomly.

Pair Corralation between Aegean Airlines and BJs Restaurants

Assuming the 90 days horizon Aegean Airlines SA is expected to generate 0.5 times more return on investment than BJs Restaurants. However, Aegean Airlines SA is 2.01 times less risky than BJs Restaurants. It trades about -0.21 of its potential returns per unit of risk. BJs Restaurants is currently generating about -0.14 per unit of risk. If you would invest  1,085  in Aegean Airlines SA on September 28, 2024 and sell it today you would lose (60.00) from holding Aegean Airlines SA or give up 5.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Aegean Airlines SA  vs.  BJs Restaurants

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. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

BJs Restaurants

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Restaurants are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, BJs Restaurants may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aegean Airlines and BJs Restaurants

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

The idea behind Aegean Airlines SA and BJs Restaurants 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.

Check out your portfolio center.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.