Correlation Between Aegean Airlines and SUMIBK

Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and SUMIBK 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 SUMIBK 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 SUMIBK 293 17 SEP 41, you can compare the effects of market volatilities on Aegean Airlines and SUMIBK 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 SUMIBK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and SUMIBK.

Diversification Opportunities for Aegean Airlines and SUMIBK

0.32

Correlation Coefficient

Aegean Airlines  SUMIBK

Weak diversification

The 3 months correlation between Aegean and SUMIBK is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and SUMIBK 293 17 SEP 41 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMIBK 293 17 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 SUMIBK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUMIBK 293 17 has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and SUMIBK go up and down completely randomly.

Pair Corralation between Aegean Airlines and SUMIBK

Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the SUMIBK. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 1.29 times less risky than SUMIBK. The pink sheet trades about -0.13 of its potential returns per unit of risk. The SUMIBK 293 17 SEP 41 is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  7,530  in SUMIBK 293 17 SEP 41 on December 4, 2024 and sell it today you would lose (117.00) from holding SUMIBK 293 17 SEP 41 or give up 1.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	47.62%
Values	Daily Returns

Aegean Airlines SA  vs.  SUMIBK 293 17 SEP 41

Aegean Airlines SA

Risk-Adjusted Performance

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 nearly stable basic indicators, Aegean Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SUMIBK 293 17

Risk-Adjusted Performance

Very Weak

Over the last 90 days SUMIBK 293 17 SEP 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SUMIBK is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aegean Airlines and SUMIBK

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

The idea behind Aegean Airlines SA and SUMIBK 293 17 SEP 41 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.