Correlation Between AEGEAN AIRLINES and Ping An

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

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

Diversification Opportunities for AEGEAN AIRLINES and Ping An

-0.24

Correlation Coefficient

AEGEAN AIRLINES  Ping An

Very good diversification

The 3 months correlation between AEGEAN and Ping is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and Ping An Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Insurance 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 Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Insurance has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and Ping An go up and down completely randomly.

Pair Corralation between AEGEAN AIRLINES and Ping An

Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to under-perform the Ping An. But the stock apears to be less risky and, when comparing its historical volatility, AEGEAN AIRLINES is 3.14 times less risky than Ping An. The stock trades about -0.08 of its potential returns per unit of risk. The Ping An Insurance is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  401.00  in Ping An Insurance on September 14, 2024 and sell it today you would earn a total of  177.00  from holding Ping An Insurance or generate 44.14% return on investment over 90 days.

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

AEGEAN AIRLINES  vs.  Ping An Insurance

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.

Ping An Insurance

Risk-Adjusted Performance

12 of 100

Good

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

Pair Trading with AEGEAN AIRLINES and Ping An

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

The idea behind AEGEAN AIRLINES and Ping An Insurance 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.