Correlation Between Aegean Airlines and National Bank

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

By analyzing existing cross correlation between Aegean Airlines SA and National Bank of, you can compare the effects of market volatilities on Aegean Airlines and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and National Bank.

Diversification Opportunities for Aegean Airlines and National Bank

0.66

Correlation Coefficient

Aegean Airlines  National Bank

Poor diversification

The 3 months correlation between Aegean and National is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 SA are associated (or correlated) with National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and National Bank go up and down completely randomly.

Pair Corralation between Aegean Airlines and National Bank

Assuming the 90 days trading horizon Aegean Airlines is expected to generate 1.63 times less return on investment than National Bank. But when comparing it to its historical volatility, Aegean Airlines SA is 1.0 times less risky than National Bank. It trades about 0.14 of its potential returns per unit of risk. National Bank of is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  681.00  in National Bank of on November 28, 2024 and sell it today you would earn a total of  161.00  from holding National Bank of or generate 23.64% return on investment over 90 days.

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

Aegean Airlines SA  vs.  National Bank of

Aegean Airlines SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aegean Airlines SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Aegean Airlines unveiled solid returns over the last few months and may actually be approaching a breakup point.

National Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in National Bank of are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, National Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aegean Airlines and National Bank

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

The idea behind Aegean Airlines SA and National Bank of 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.