Correlation Between Aegean Airlines and 594918BK9

Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and 594918BK9 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 594918BK9 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 MICROSOFT P 42, you can compare the effects of market volatilities on Aegean Airlines and 594918BK9 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 594918BK9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and 594918BK9.

Diversification Opportunities for Aegean Airlines and 594918BK9

0.61

Correlation Coefficient

Aegean Airlines  594918BK9

Poor diversification

The 3 months correlation between Aegean and 594918BK9 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and MICROSOFT P 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICROSOFT P 42 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 594918BK9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICROSOFT P 42 has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and 594918BK9 go up and down completely randomly.

Pair Corralation between Aegean Airlines and 594918BK9

Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the 594918BK9. In addition to that, Aegean Airlines is 3.5 times more volatile than MICROSOFT P 42. It trades about -0.22 of its total potential returns per unit of risk. MICROSOFT P 42 is currently generating about 0.1 per unit of volatility. If you would invest  9,743  in MICROSOFT P 42 on September 4, 2024 and sell it today you would earn a total of  134.00  from holding MICROSOFT P 42 or generate 1.38% 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.  MICROSOFT P 42

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 conflicting 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.

MICROSOFT P 42

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MICROSOFT P 42 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 594918BK9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aegean Airlines and 594918BK9

The main advantage of trading using opposite Aegean Airlines and 594918BK9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, 594918BK9 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 594918BK9 will offset losses from the drop in 594918BK9's long position.

The idea behind Aegean Airlines SA and MICROSOFT P 42 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 Commodity Directory module to find actively traded commodities issued by global exchanges.