Correlation Between Apollo Medical and Aegean Airlines

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

By analyzing existing cross correlation between Apollo Medical Holdings and Aegean Airlines SA, you can compare the effects of market volatilities on Apollo Medical 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 Apollo Medical with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and Aegean Airlines.

Diversification Opportunities for Apollo Medical and Aegean Airlines

-0.65

Correlation Coefficient

Apollo Medical  Aegean Airlines

Excellent diversification

The 3 months correlation between Apollo and Aegean is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical Holdings and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA and Apollo Medical 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 Apollo Medical Holdings 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 SA has no effect on the direction of Apollo Medical i.e., Apollo Medical and Aegean Airlines go up and down completely randomly.

Pair Corralation between Apollo Medical and Aegean Airlines

Assuming the 90 days horizon Apollo Medical Holdings is expected to generate 0.97 times more return on investment than Aegean Airlines. However, Apollo Medical Holdings is 1.03 times less risky than Aegean Airlines. It trades about 0.13 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.15 per unit of risk. If you would invest  3,580  in Apollo Medical Holdings on September 3, 2024 and sell it today you would earn a total of  420.00  from holding Apollo Medical Holdings or generate 11.73% return on investment over 90 days.

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

Apollo Medical Holdings  vs.  Aegean Airlines SA

Apollo Medical Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Medical Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Apollo Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Apollo Medical and Aegean Airlines

The main advantage of trading using opposite Apollo Medical and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical 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' long position.

The idea behind Apollo Medical Holdings and Aegean Airlines SA 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.