Correlation Between ADHI KARYA and AEGEAN AIRLINES

Can any of the company-specific risk be diversified away by investing in both ADHI KARYA and AEGEAN AIRLINES 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 ADHI KARYA and AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ADHI KARYA and AEGEAN AIRLINES, you can compare the effects of market volatilities on ADHI KARYA and AEGEAN AIRLINES 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 ADHI KARYA with a short position of AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADHI KARYA and AEGEAN AIRLINES.

Diversification Opportunities for ADHI KARYA and AEGEAN AIRLINES

-0.4

Correlation Coefficient

ADHI KARYA  AEGEAN AIRLINES

Very good diversification

The 3 months correlation between ADHI and AEGEAN is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding ADHI KARYA and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES and ADHI KARYA 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 ADHI KARYA are associated (or correlated) with AEGEAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEGEAN AIRLINES has no effect on the direction of ADHI KARYA i.e., ADHI KARYA and AEGEAN AIRLINES go up and down completely randomly.

Pair Corralation between ADHI KARYA and AEGEAN AIRLINES

Assuming the 90 days trading horizon ADHI KARYA is expected to generate 2.72 times less return on investment than AEGEAN AIRLINES. In addition to that, ADHI KARYA is 9.12 times more volatile than AEGEAN AIRLINES. It trades about 0.01 of its total potential returns per unit of risk. AEGEAN AIRLINES is currently generating about 0.2 per unit of volatility. If you would invest  982.00  in AEGEAN AIRLINES on December 26, 2024 and sell it today you would earn a total of  208.00  from holding AEGEAN AIRLINES or generate 21.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

ADHI KARYA  vs.  AEGEAN AIRLINES

ADHI KARYA

Risk-Adjusted Performance

Very Weak

Over the last 90 days ADHI KARYA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively fragile basic indicators, ADHI KARYA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

AEGEAN AIRLINES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AEGEAN AIRLINES are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, AEGEAN AIRLINES exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ADHI KARYA and AEGEAN AIRLINES

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

The idea behind ADHI KARYA and AEGEAN AIRLINES 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.