Correlation Between Aegean Airlines and Onyx Acquisition

Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Onyx Acquisition 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 Onyx Acquisition 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 Onyx Acquisition Co, you can compare the effects of market volatilities on Aegean Airlines and Onyx Acquisition 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 Onyx Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Onyx Acquisition.

Diversification Opportunities for Aegean Airlines and Onyx Acquisition

0.05

Correlation Coefficient

Aegean Airlines  Onyx Acquisition

Significant diversification

The 3 months correlation between Aegean and Onyx is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Onyx Acquisition Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onyx Acquisition 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 Onyx Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onyx Acquisition has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Onyx Acquisition go up and down completely randomly.

Pair Corralation between Aegean Airlines and Onyx Acquisition

Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Onyx Acquisition. In addition to that, Aegean Airlines is 1.85 times more volatile than Onyx Acquisition Co. It trades about -0.13 of its total potential returns per unit of risk. Onyx Acquisition Co is currently generating about 0.04 per unit of volatility. If you would invest  1,121  in Onyx Acquisition Co on September 18, 2024 and sell it today you would earn a total of  10.00  from holding Onyx Acquisition Co or generate 0.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	57.81%
Values	Daily Returns

Aegean Airlines SA  vs.  Onyx Acquisition Co

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 weak 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.

Onyx Acquisition

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Aegean Airlines and Onyx Acquisition

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

The idea behind Aegean Airlines SA and Onyx Acquisition Co 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.

Check out your portfolio center.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.