Correlation Between AEGEAN AIRLINES and Nok Airlines

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

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

Diversification Opportunities for AEGEAN AIRLINES and Nok Airlines

0.0

Correlation Coefficient

AEGEAN AIRLINES  Nok Airlines

Pay attention - limited upside

The 3 months correlation between AEGEAN and Nok is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and Nok Airlines PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nok Airlines PCL 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 Nok Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nok Airlines PCL has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and Nok Airlines go up and down completely randomly.

Pair Corralation between AEGEAN AIRLINES and Nok Airlines

If you would invest  537.00  in AEGEAN AIRLINES on October 8, 2024 and sell it today you would earn a total of  487.00  from holding AEGEAN AIRLINES or generate 90.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AEGEAN AIRLINES  vs.  Nok Airlines PCL

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 rather sound basic indicators, AEGEAN AIRLINES is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Nok Airlines PCL

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with AEGEAN AIRLINES and Nok Airlines

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

The idea behind AEGEAN AIRLINES and Nok Airlines PCL 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.