Correlation Between Aegean Airlines and Horizon Space

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

Diversification Opportunities for Aegean Airlines and Horizon Space

0.04

Correlation Coefficient

Aegean Airlines  Horizon Space

Significant diversification

The 3 months correlation between Aegean and Horizon is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Horizon Space Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Space Acquisition 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 Horizon Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Space Acquisition has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Horizon Space go up and down completely randomly.

Pair Corralation between Aegean Airlines and Horizon Space

Assuming the 90 days horizon Aegean Airlines is expected to generate 15.18 times less return on investment than Horizon Space. But when comparing it to its historical volatility, Aegean Airlines SA is 14.94 times less risky than Horizon Space. It trades about 0.13 of its potential returns per unit of risk. Horizon Space Acquisition is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Horizon Space Acquisition on December 27, 2024 and sell it today you would lose (0.34) from holding Horizon Space Acquisition or give up 17.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	49.21%
Values	Daily Returns

Aegean Airlines SA  vs.  Horizon Space Acquisition

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.

Horizon Space Acquisition

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Space Acquisition are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Horizon Space showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aegean Airlines and Horizon Space

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

The idea behind Aegean Airlines SA and Horizon Space Acquisition 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.