Correlation Between LENSAR and Aegean Airlines

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

By analyzing existing cross correlation between LENSAR Inc and Aegean Airlines SA, you can compare the effects of market volatilities on LENSAR 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 LENSAR with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and Aegean Airlines.

Diversification Opportunities for LENSAR and Aegean Airlines

-0.85

Correlation Coefficient

LENSAR  Aegean Airlines

Pay attention - limited upside

The 3 months correlation between LENSAR and Aegean is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA and LENSAR 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 LENSAR Inc 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 SA has no effect on the direction of LENSAR i.e., LENSAR and Aegean Airlines go up and down completely randomly.

Pair Corralation between LENSAR and Aegean Airlines

Given the investment horizon of 90 days LENSAR Inc is expected to generate 3.74 times more return on investment than Aegean Airlines. However, LENSAR is 3.74 times more volatile than Aegean Airlines SA. It trades about 0.2 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.13 per unit of risk. If you would invest  446.00  in LENSAR Inc on September 5, 2024 and sell it today you would earn a total of  324.00  from holding LENSAR Inc or generate 72.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

LENSAR Inc  vs.  Aegean Airlines SA

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 weak basic indicators, LENSAR reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with LENSAR and Aegean Airlines

The main advantage of trading using opposite LENSAR and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR 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' long position.

The idea behind LENSAR Inc and Aegean Airlines SA 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.