Correlation Between Aegean Airlines and CECO Environmental

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

Diversification Opportunities for Aegean Airlines and CECO Environmental

-0.49

Correlation Coefficient

Aegean Airlines  CECO Environmental

Very good diversification

The 3 months correlation between Aegean and CECO is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and CECO Environmental Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CECO Environmental Corp 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 CECO Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CECO Environmental Corp has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and CECO Environmental go up and down completely randomly.

Pair Corralation between Aegean Airlines and CECO Environmental

Assuming the 90 days horizon Aegean Airlines SA is expected to generate 0.76 times more return on investment than CECO Environmental. However, Aegean Airlines SA is 1.31 times less risky than CECO Environmental. It trades about 0.13 of its potential returns per unit of risk. CECO Environmental Corp is currently generating about -0.1 per unit of risk. If you would invest  1,025  in Aegean Airlines SA on December 27, 2024 and sell it today you would earn a total of  170.00  from holding Aegean Airlines SA or generate 16.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Aegean Airlines SA  vs.  CECO Environmental Corp

Aegean Airlines SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aegean Airlines SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Aegean Airlines reported solid returns over the last few months and may actually be approaching a breakup point.

CECO Environmental Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CECO Environmental Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Aegean Airlines and CECO Environmental

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

The idea behind Aegean Airlines SA and CECO Environmental Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.