Correlation Between Aegean Airlines and Microbot Medical

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

Diversification Opportunities for Aegean Airlines and Microbot Medical

-0.14

Correlation Coefficient

Aegean Airlines  Microbot Medical

Good diversification

The 3 months correlation between Aegean and Microbot is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Microbot Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microbot Medical 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 Microbot Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microbot Medical has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Microbot Medical go up and down completely randomly.

Pair Corralation between Aegean Airlines and Microbot Medical

Assuming the 90 days horizon Aegean Airlines is expected to generate 4.42 times less return on investment than Microbot Medical. But when comparing it to its historical volatility, Aegean Airlines SA is 6.9 times less risky than Microbot Medical. It trades about 0.12 of its potential returns per unit of risk. Microbot Medical is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  118.00  in Microbot Medical on December 29, 2024 and sell it today you would earn a total of  28.00  from holding Microbot Medical or generate 23.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Aegean Airlines SA  vs.  Microbot Medical

Aegean Airlines SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aegean Airlines SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Aegean Airlines reported solid returns over the last few months and may actually be approaching a breakup point.

Microbot Medical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Microbot Medical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Microbot Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aegean Airlines and Microbot Medical

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

The idea behind Aegean Airlines SA and Microbot Medical 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.