Correlation Between Aegean Airlines and Griffon

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

Diversification Opportunities for Aegean Airlines and Griffon

-0.35

Correlation Coefficient

Aegean Airlines  Griffon

Very good diversification

The 3 months correlation between Aegean and Griffon is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon 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 Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Griffon go up and down completely randomly.

Pair Corralation between Aegean Airlines and Griffon

Assuming the 90 days horizon Aegean Airlines SA is expected to generate 1.05 times more return on investment than Griffon. However, Aegean Airlines is 1.05 times more volatile than Griffon. It trades about 0.12 of its potential returns per unit of risk. Griffon is currently generating about -0.01 per unit of risk. If you would invest  1,025  in Aegean Airlines SA on December 22, 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	Insignificant
Accuracy	95.31%
Values	Daily Returns

Aegean Airlines SA  vs.  Griffon

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.

Griffon

Risk-Adjusted Performance

Very Weak

Over the last 90 days Griffon has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Griffon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Aegean Airlines and Griffon

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

The idea behind Aegean Airlines SA and Griffon 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.