Correlation Between AEGEAN AIRLINES and SCANDMEDICAL SOLDK-040

Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AEGEAN AIRLINES and SCANDMEDICAL SOLDK 040, you can compare the effects of market volatilities on AEGEAN AIRLINES and SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and SCANDMEDICAL SOLDK-040.

Diversification Opportunities for AEGEAN AIRLINES and SCANDMEDICAL SOLDK-040

0.38

Correlation Coefficient

AEGEAN AIRLINES  SCANDMEDICAL SOLDK-040

Weak diversification

The 3 months correlation between AEGEAN and SCANDMEDICAL is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and SCANDMEDICAL SOLDK 040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDMEDICAL SOLDK 040 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 are associated (or correlated) with SCANDMEDICAL SOLDK-040. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDMEDICAL SOLDK 040 has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and SCANDMEDICAL SOLDK-040 go up and down completely randomly.

Pair Corralation between AEGEAN AIRLINES and SCANDMEDICAL SOLDK-040

Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to under-perform the SCANDMEDICAL SOLDK-040. But the stock apears to be less risky and, when comparing its historical volatility, AEGEAN AIRLINES is 2.17 times less risky than SCANDMEDICAL SOLDK-040. The stock trades about -0.18 of its potential returns per unit of risk. The SCANDMEDICAL SOLDK 040 is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  83.00  in SCANDMEDICAL SOLDK 040 on September 4, 2024 and sell it today you would lose (4.00) from holding SCANDMEDICAL SOLDK 040 or give up 4.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

AEGEAN AIRLINES  vs.  SCANDMEDICAL SOLDK 040

AEGEAN AIRLINES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEGEAN AIRLINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

SCANDMEDICAL SOLDK 040

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCANDMEDICAL SOLDK 040 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SCANDMEDICAL SOLDK-040 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AEGEAN AIRLINES and SCANDMEDICAL SOLDK-040

The main advantage of trading using opposite AEGEAN AIRLINES and SCANDMEDICAL SOLDK-040 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 will offset losses from the drop in SCANDMEDICAL SOLDK-040's long position.

The idea behind AEGEAN AIRLINES and SCANDMEDICAL SOLDK 040 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.