Correlation Between COSMOSTEEL HLDGS and Aegean Airlines

Can any of the company-specific risk be diversified away by investing in both COSMOSTEEL HLDGS and Aegean Airlines 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 COSMOSTEEL HLDGS and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COSMOSTEEL HLDGS and Aegean Airlines SA, you can compare the effects of market volatilities on COSMOSTEEL HLDGS and Aegean Airlines 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 COSMOSTEEL HLDGS with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMOSTEEL HLDGS and Aegean Airlines.

Diversification Opportunities for COSMOSTEEL HLDGS and Aegean Airlines

0.4

Correlation Coefficient

COSMOSTEEL HLDGS  Aegean Airlines

Very weak diversification

The 3 months correlation between COSMOSTEEL and Aegean is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA and COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS are associated (or correlated) with Aegean Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegean Airlines SA has no effect on the direction of COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and Aegean Airlines go up and down completely randomly.

Pair Corralation between COSMOSTEEL HLDGS and Aegean Airlines

Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to generate 1.0 times less return on investment than Aegean Airlines. In addition to that, COSMOSTEEL HLDGS is 1.74 times more volatile than Aegean Airlines SA. It trades about 0.1 of its total potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.17 per unit of volatility. If you would invest  993.00  in Aegean Airlines SA on December 31, 2024 and sell it today you would earn a total of  228.00  from holding Aegean Airlines SA or generate 22.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

COSMOSTEEL HLDGS  vs.  Aegean Airlines SA

COSMOSTEEL HLDGS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in COSMOSTEEL HLDGS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, COSMOSTEEL HLDGS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Aegean Airlines SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aegean Airlines SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Aegean Airlines reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COSMOSTEEL HLDGS and Aegean Airlines

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

The idea behind COSMOSTEEL HLDGS and Aegean Airlines SA 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.