Correlation Between Fourlis Holdings and Aegean Airlines

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

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

Diversification Opportunities for Fourlis Holdings and Aegean Airlines

0.47

Correlation Coefficient

Fourlis Holdings  Aegean Airlines

Very weak diversification

The 3 months correlation between Fourlis and Aegean is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fourlis Holdings SA 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 Fourlis Holdings 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 Fourlis Holdings SA 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 Fourlis Holdings i.e., Fourlis Holdings and Aegean Airlines go up and down completely randomly.

Pair Corralation between Fourlis Holdings and Aegean Airlines

Assuming the 90 days trading horizon Fourlis Holdings is expected to generate 2.59 times less return on investment than Aegean Airlines. But when comparing it to its historical volatility, Fourlis Holdings SA is 1.28 times less risky than Aegean Airlines. It trades about 0.1 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,010  in Aegean Airlines SA on December 24, 2024 and sell it today you would earn a total of  203.00  from holding Aegean Airlines SA or generate 20.1% return on investment over 90 days.

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

Fourlis Holdings SA  vs.  Aegean Airlines SA

Fourlis Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fourlis Holdings SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Fourlis Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Aegean Airlines unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fourlis Holdings and Aegean Airlines

The main advantage of trading using opposite Fourlis Holdings and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fourlis Holdings 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 Fourlis Holdings SA 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.