Correlation Between AUSTEVOLL SEAFOOD and AEGEAN AIRLINES

Can any of the company-specific risk be diversified away by investing in both AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AUSTEVOLL SEAFOOD and AEGEAN AIRLINES, you can compare the effects of market volatilities on AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUSTEVOLL SEAFOOD and AEGEAN AIRLINES.

Diversification Opportunities for AUSTEVOLL SEAFOOD and AEGEAN AIRLINES

-0.33

Correlation Coefficient

AUSTEVOLL SEAFOOD  AEGEAN AIRLINES

Very good diversification

The 3 months correlation between AUSTEVOLL and AEGEAN is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding AUSTEVOLL SEAFOOD and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD 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 has no effect on the direction of AUSTEVOLL SEAFOOD i.e., AUSTEVOLL SEAFOOD and AEGEAN AIRLINES go up and down completely randomly.

Pair Corralation between AUSTEVOLL SEAFOOD and AEGEAN AIRLINES

Assuming the 90 days trading horizon AUSTEVOLL SEAFOOD is expected to under-perform the AEGEAN AIRLINES. In addition to that, AUSTEVOLL SEAFOOD is 1.02 times more volatile than AEGEAN AIRLINES. It trades about -0.25 of its total potential returns per unit of risk. AEGEAN AIRLINES is currently generating about 0.35 per unit of volatility. If you would invest  928.00  in AEGEAN AIRLINES on September 22, 2024 and sell it today you would earn a total of  78.00  from holding AEGEAN AIRLINES or generate 8.41% return on investment over 90 days.

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

AUSTEVOLL SEAFOOD  vs.  AEGEAN AIRLINES

AUSTEVOLL SEAFOOD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AUSTEVOLL SEAFOOD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AUSTEVOLL SEAFOOD is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

AEGEAN AIRLINES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEGEAN AIRLINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, AEGEAN AIRLINES is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AUSTEVOLL SEAFOOD and AEGEAN AIRLINES

The main advantage of trading using opposite AUSTEVOLL SEAFOOD and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUSTEVOLL SEAFOOD 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's long position.

The idea behind AUSTEVOLL SEAFOOD and AEGEAN AIRLINES 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.