Correlation Between VULCAN MATERIALS and AEGEAN AIRLINES

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

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

Diversification Opportunities for VULCAN MATERIALS and AEGEAN AIRLINES

0.36

Correlation Coefficient

VULCAN MATERIALS  AEGEAN AIRLINES

Weak diversification

The 3 months correlation between VULCAN and AEGEAN is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding VULCAN MATERIALS and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and VULCAN MATERIALS 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 VULCAN MATERIALS 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 VULCAN MATERIALS i.e., VULCAN MATERIALS and AEGEAN AIRLINES go up and down completely randomly.

Pair Corralation between VULCAN MATERIALS and AEGEAN AIRLINES

Assuming the 90 days trading horizon VULCAN MATERIALS is expected to generate 2.13 times less return on investment than AEGEAN AIRLINES. In addition to that, VULCAN MATERIALS is 1.38 times more volatile than AEGEAN AIRLINES. It trades about 0.05 of its total potential returns per unit of risk. AEGEAN AIRLINES is currently generating about 0.16 per unit of volatility. If you would invest  1,110  in AEGEAN AIRLINES on April 25, 2025 and sell it today you would earn a total of  166.00  from holding AEGEAN AIRLINES or generate 14.95% return on investment over 90 days.

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

VULCAN MATERIALS  vs.  AEGEAN AIRLINES

VULCAN MATERIALS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VULCAN MATERIALS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, VULCAN MATERIALS may actually be approaching a critical reversion point that can send shares even higher in August 2025.

AEGEAN AIRLINES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AEGEAN AIRLINES are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, AEGEAN AIRLINES exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VULCAN MATERIALS and AEGEAN AIRLINES

The main advantage of trading using opposite VULCAN MATERIALS and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VULCAN MATERIALS 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 VULCAN MATERIALS 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.