Correlation Between Everest Consolidator and Aegean Airlines

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

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

Diversification Opportunities for Everest Consolidator and Aegean Airlines

-0.21

Correlation Coefficient

Everest Consolidator  Aegean Airlines

Very good diversification

The 3 months correlation between Everest and Aegean is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Everest Consolidator Acquisiti 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 Everest Consolidator 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 Everest Consolidator Acquisition 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 Everest Consolidator i.e., Everest Consolidator and Aegean Airlines go up and down completely randomly.

Pair Corralation between Everest Consolidator and Aegean Airlines

Assuming the 90 days trading horizon Everest Consolidator Acquisition is expected to generate 1.57 times more return on investment than Aegean Airlines. However, Everest Consolidator is 1.57 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 -0.13 per unit of risk. If you would invest  1,121  in Everest Consolidator Acquisition on September 18, 2024 and sell it today you would lose (18.00) from holding Everest Consolidator Acquisition or give up 1.61% of portfolio value over 90 days.

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

Everest Consolidator Acquisiti  vs.  Aegean Airlines SA

Everest Consolidator

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Everest Consolidator Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Everest Consolidator is not utilizing all of its potentials. The latest stock price disarray, 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. 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 Everest Consolidator and Aegean Airlines

The main advantage of trading using opposite Everest Consolidator and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everest Consolidator 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 Everest Consolidator Acquisition 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 Anywhere module to track or share privately all of your investments from the convenience of any device.