Correlation Between Alpha Services and Aegean Airlines

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

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

Diversification Opportunities for Alpha Services and Aegean Airlines

0.32

Correlation Coefficient

Alpha Services  Aegean Airlines

Weak diversification

The 3 months correlation between Alpha and Aegean is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Services and 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 Alpha Services 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 Alpha Services and 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 Alpha Services i.e., Alpha Services and Aegean Airlines go up and down completely randomly.

Pair Corralation between Alpha Services and Aegean Airlines

Assuming the 90 days trading horizon Alpha Services and is expected to generate 1.24 times more return on investment than Aegean Airlines. However, Alpha Services is 1.24 times more volatile than Aegean Airlines SA. 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  157.00  in Alpha Services and on September 5, 2024 and sell it today you would lose (1.00) from holding Alpha Services and or give up 0.64% of portfolio value over 90 days.

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

Alpha Services and  vs.  Aegean Airlines SA

Alpha Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpha Services and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Alpha Services is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the 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 Alpha Services and Aegean Airlines

The main advantage of trading using opposite Alpha Services and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Services 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 Alpha Services and 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.