Correlation Between ARDAGH METAL and Aegean Airlines

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

By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and Aegean Airlines SA, you can compare the effects of market volatilities on ARDAGH METAL 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 ARDAGH METAL with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Aegean Airlines.

Diversification Opportunities for ARDAGH METAL and Aegean Airlines

-0.54

Correlation Coefficient

ARDAGH METAL  Aegean Airlines

Excellent diversification

The 3 months correlation between ARDAGH and Aegean is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 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 ARDAGH METAL 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 ARDAGH METAL PACDL 0001 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 ARDAGH METAL i.e., ARDAGH METAL and Aegean Airlines go up and down completely randomly.

Pair Corralation between ARDAGH METAL and Aegean Airlines

Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to generate 2.34 times more return on investment than Aegean Airlines. However, ARDAGH METAL is 2.34 times more volatile than Aegean Airlines SA. It trades about 0.04 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.15 per unit of risk. If you would invest  320.00  in ARDAGH METAL PACDL 0001 on September 3, 2024 and sell it today you would earn a total of  20.00  from holding ARDAGH METAL PACDL 0001 or generate 6.25% return on investment over 90 days.

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

ARDAGH METAL PACDL 0001  vs.  Aegean Airlines SA

ARDAGH METAL PACDL

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ARDAGH METAL PACDL 0001 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ARDAGH METAL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 fragile 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 ARDAGH METAL and Aegean Airlines

The main advantage of trading using opposite ARDAGH METAL and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL 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 ARDAGH METAL PACDL 0001 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.