Correlation Between Aegean Airlines and Kri Kri

Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Kri Kri 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 Kri Kri 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 Kri Kri Milk Industry, you can compare the effects of market volatilities on Aegean Airlines and Kri Kri 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 Kri Kri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Kri Kri.

Diversification Opportunities for Aegean Airlines and Kri Kri

0.78

Correlation Coefficient

Aegean Airlines  Kri Kri

Poor diversification

The 3 months correlation between Aegean and Kri is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Kri Kri Milk Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kri Kri Milk 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 Kri Kri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kri Kri Milk has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Kri Kri go up and down completely randomly.

Pair Corralation between Aegean Airlines and Kri Kri

Assuming the 90 days trading horizon Aegean Airlines is expected to generate 1.86 times less return on investment than Kri Kri. But when comparing it to its historical volatility, Aegean Airlines SA is 1.17 times less risky than Kri Kri. It trades about 0.07 of its potential returns per unit of risk. Kri Kri Milk Industry is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,415  in Kri Kri Milk Industry on October 26, 2024 and sell it today you would earn a total of  160.00  from holding Kri Kri Milk Industry or generate 11.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.31%
Values	Daily Returns

Aegean Airlines SA  vs.  Kri Kri Milk Industry

Aegean Airlines SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aegean Airlines SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Aegean Airlines may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kri Kri Milk

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kri Kri Milk Industry are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Kri Kri may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Aegean Airlines and Kri Kri

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

The idea behind Aegean Airlines SA and Kri Kri Milk Industry 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.