Correlation Between Gr Sarantis and Aegean Airlines

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

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

Diversification Opportunities for Gr Sarantis and Aegean Airlines

0.81

Correlation Coefficient

Gr Sarantis  Aegean Airlines

Very poor diversification

The 3 months correlation between SAR and Aegean is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Gr Sarantis 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 Gr Sarantis 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 Gr Sarantis 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 Gr Sarantis i.e., Gr Sarantis and Aegean Airlines go up and down completely randomly.

Pair Corralation between Gr Sarantis and Aegean Airlines

Assuming the 90 days trading horizon Gr Sarantis SA is expected to generate 1.2 times more return on investment than Aegean Airlines. However, Gr Sarantis is 1.2 times more volatile than Aegean Airlines SA. It trades about 0.18 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.21 per unit of risk. If you would invest  1,066  in Gr Sarantis SA on December 28, 2024 and sell it today you would earn a total of  248.00  from holding Gr Sarantis SA or generate 23.26% return on investment over 90 days.

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

Gr Sarantis SA  vs.  Aegean Airlines SA

Gr Sarantis SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gr Sarantis SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Gr Sarantis unveiled solid returns over the last few months and may actually be approaching a breakup point.

Aegean Airlines SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aegean Airlines SA are ranked lower than 16 (%) 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 Gr Sarantis and Aegean Airlines

The main advantage of trading using opposite Gr Sarantis and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gr Sarantis 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 Gr Sarantis 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.