Correlation Between Aegean Airlines and Kronos Worldwide
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines and Kronos Worldwide 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 Kronos Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegean Airlines SA and Kronos Worldwide, you can compare the effects of market volatilities on Aegean Airlines and Kronos Worldwide 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 Kronos Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and Kronos Worldwide.
Diversification Opportunities for Aegean Airlines and Kronos Worldwide
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aegean and Kronos is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and Kronos Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Worldwide 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 SA are associated (or correlated) with Kronos Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kronos Worldwide has no effect on the direction of Aegean Airlines i.e., Aegean Airlines and Kronos Worldwide go up and down completely randomly.
Pair Corralation between Aegean Airlines and Kronos Worldwide
Assuming the 90 days horizon Aegean Airlines SA is expected to under-perform the Kronos Worldwide. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aegean Airlines SA is 1.88 times less risky than Kronos Worldwide. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Kronos Worldwide is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 805.00 in Kronos Worldwide on August 24, 2024 and sell it today you would earn a total of 365.00 from holding Kronos Worldwide or generate 45.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Aegean Airlines SA vs. Kronos Worldwide
Performance |
| Timeline |
| Aegean Airlines SA |
| Kronos Worldwide |
Aegean Airlines and Kronos Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and Kronos Worldwide
The main advantage of trading using opposite Aegean Airlines and Kronos Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines position performs unexpectedly, Kronos Worldwide 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 Kronos Worldwide will offset losses from the drop in Kronos Worldwide's long position.| Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
| Kronos Worldwide vs. Eshallgo Class A | Kronos Worldwide vs. Amtech Systems | Kronos Worldwide vs. Gold Fields Ltd | Kronos Worldwide vs. Aegean Airlines SA |
Check out your portfolio center.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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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