Correlation Between Lotus Technology and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Lotus Technology 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 Lotus Technology and Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotus Technology Warrants and Aegean Airlines SA, you can compare the effects of market volatilities on Lotus Technology 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 Lotus Technology with a short position of Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotus Technology and Aegean Airlines.
Diversification Opportunities for Lotus Technology and Aegean Airlines
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotus and Aegean is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lotus Technology Warrants 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 Lotus Technology 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 Lotus Technology Warrants 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 Lotus Technology i.e., Lotus Technology and Aegean Airlines go up and down completely randomly.
Pair Corralation between Lotus Technology and Aegean Airlines
Assuming the 90 days horizon Lotus Technology Warrants is expected to generate 4.12 times more return on investment than Aegean Airlines. However, Lotus Technology is 4.12 times more volatile than Aegean Airlines SA. It trades about 0.07 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.22 per unit of risk. If you would invest 27.00 in Lotus Technology Warrants on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Lotus Technology Warrants or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
Lotus Technology Warrants vs. Aegean Airlines SA
Performance |
| Timeline |
| Lotus Technology Warrants |
| Aegean Airlines SA |
Lotus Technology and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotus Technology and Aegean Airlines
The main advantage of trading using opposite Lotus Technology and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotus Technology 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.| Lotus Technology vs. National Beverage Corp | Lotus Technology vs. Fomento Economico Mexicano | Lotus Technology vs. Boston Beer | Lotus Technology vs. Suntory Beverage Food |
| Aegean Airlines vs. Apple Inc | Aegean Airlines vs. Microsoft | Aegean Airlines vs. Amazon Inc | Aegean Airlines vs. Alphabet Inc Class C |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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