Correlation Between AEGEAN AIRLINES and SBI Insurance

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

By analyzing existing cross correlation between AEGEAN AIRLINES and SBI Insurance Group, you can compare the effects of market volatilities on AEGEAN AIRLINES and SBI Insurance 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 SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and SBI Insurance.

Diversification Opportunities for AEGEAN AIRLINES and SBI Insurance

-0.43

Correlation Coefficient

AEGEAN AIRLINES  SBI Insurance

Very good diversification

The 3 months correlation between AEGEAN and SBI is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group 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 are associated (or correlated) with SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and SBI Insurance go up and down completely randomly.

Pair Corralation between AEGEAN AIRLINES and SBI Insurance

Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to under-perform the SBI Insurance. But the stock apears to be less risky and, when comparing its historical volatility, AEGEAN AIRLINES is 1.08 times less risky than SBI Insurance. The stock trades about -0.08 of its potential returns per unit of risk. The SBI Insurance Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  565.00  in SBI Insurance Group on September 15, 2024 and sell it today you would earn a total of  60.00  from holding SBI Insurance Group or generate 10.62% return on investment over 90 days.

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

AEGEAN AIRLINES  vs.  SBI Insurance Group

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 latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

SBI Insurance Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Insurance Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SBI Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with AEGEAN AIRLINES and SBI Insurance

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

The idea behind AEGEAN AIRLINES and SBI Insurance Group 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.