Correlation Between LANSON-BCC INH and Aegean Airlines

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

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

Diversification Opportunities for LANSON-BCC INH and Aegean Airlines

0.65

Correlation Coefficient

LANSON-BCC INH  Aegean Airlines

Poor diversification

The 3 months correlation between LANSON-BCC and Aegean is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding LANSON BCC INH EO 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 LANSON-BCC INH 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 LANSON BCC INH EO 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 LANSON-BCC INH i.e., LANSON-BCC INH and Aegean Airlines go up and down completely randomly.

Pair Corralation between LANSON-BCC INH and Aegean Airlines

Assuming the 90 days horizon LANSON-BCC INH is expected to generate 4.23 times less return on investment than Aegean Airlines. But when comparing it to its historical volatility, LANSON BCC INH EO is 1.36 times less risky than Aegean Airlines. It trades about 0.04 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,002  in Aegean Airlines SA on December 22, 2024 and sell it today you would earn a total of  157.00  from holding Aegean Airlines SA or generate 15.67% return on investment over 90 days.

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

LANSON BCC INH EO  vs.  Aegean Airlines SA

LANSON BCC INH

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LANSON BCC INH EO are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, LANSON-BCC INH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aegean Airlines reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LANSON-BCC INH and Aegean Airlines

The main advantage of trading using opposite LANSON-BCC INH and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LANSON-BCC INH 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 LANSON BCC INH EO 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.