Correlation Between Aegean Airlines and LENSAR

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

Diversification Opportunities for Aegean Airlines and LENSAR

-0.85

Correlation Coefficient

Aegean Airlines  LENSAR

Pay attention - limited upside

The 3 months correlation between Aegean and LENSAR is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc 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 LENSAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENSAR Inc has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and LENSAR go up and down completely randomly.

Pair Corralation between Aegean Airlines and LENSAR

Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the LENSAR. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 1.99 times less risky than LENSAR. The pink sheet trades about -0.21 of its potential returns per unit of risk. The LENSAR Inc is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  586.00  in LENSAR Inc on September 5, 2024 and sell it today you would earn a total of  184.00  from holding LENSAR Inc or generate 31.4% return on investment over 90 days.

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

Aegean Airlines SA  vs.  LENSAR Inc

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 latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

LENSAR Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LENSAR Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, LENSAR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aegean Airlines and LENSAR

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

The idea behind Aegean Airlines SA and LENSAR Inc 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.

Check out your portfolio center.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.