Correlation Between Profile Systems and Aegean Airlines

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

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

Diversification Opportunities for Profile Systems and Aegean Airlines

0.06

Correlation Coefficient

Profile Systems  Aegean Airlines

Significant diversification

The 3 months correlation between Profile and Aegean is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Profile Systems Software 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 Profile Systems 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 Profile Systems Software 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 Profile Systems i.e., Profile Systems and Aegean Airlines go up and down completely randomly.

Pair Corralation between Profile Systems and Aegean Airlines

Assuming the 90 days trading horizon Profile Systems Software is expected to generate 0.98 times more return on investment than Aegean Airlines. However, Profile Systems Software is 1.02 times less risky than Aegean Airlines. It trades about 0.0 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.16 per unit of risk. If you would invest  526.00  in Profile Systems Software on September 5, 2024 and sell it today you would lose (4.00) from holding Profile Systems Software or give up 0.76% of portfolio value over 90 days.

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

Profile Systems Software  vs.  Aegean Airlines SA

Profile Systems Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Profile Systems Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Profile Systems is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Profile Systems and Aegean Airlines

The main advantage of trading using opposite Profile Systems and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profile Systems 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 Profile Systems Software 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.