Correlation Between Aegean Airlines and Seaboard

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

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

Diversification Opportunities for Aegean Airlines and Seaboard

0.69

Correlation Coefficient

Aegean Airlines  Seaboard

Poor diversification

The 3 months correlation between Aegean and Seaboard is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Seaboard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seaboard and Aegean Airlines 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 Aegean Airlines SA are associated (or correlated) with Seaboard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seaboard has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Seaboard go up and down completely randomly.

Pair Corralation between Aegean Airlines and Seaboard

Assuming the 90 days horizon Aegean Airlines SA is expected to generate 1.78 times more return on investment than Seaboard. However, Aegean Airlines is 1.78 times more volatile than Seaboard. It trades about 0.07 of its potential returns per unit of risk. Seaboard is currently generating about -0.05 per unit of risk. If you would invest  528.00  in Aegean Airlines SA on September 28, 2024 and sell it today you would earn a total of  474.00  from holding Aegean Airlines SA or generate 89.77% return on investment over 90 days.

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

Aegean Airlines SA  vs.  Seaboard

Aegean Airlines SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aegean Airlines SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Seaboard

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seaboard has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Aegean Airlines and Seaboard

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

The idea behind Aegean Airlines SA and Seaboard 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.