Correlation Between AENA SME and Grupo Aeroportuario

Can any of the company-specific risk be diversified away by investing in both AENA SME and Grupo Aeroportuario 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 AENA SME and Grupo Aeroportuario into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AENA SME UNSPADR110 and Grupo Aeroportuario del, you can compare the effects of market volatilities on AENA SME and Grupo Aeroportuario 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 AENA SME with a short position of Grupo Aeroportuario. Check out your portfolio center. Please also check ongoing floating volatility patterns of AENA SME and Grupo Aeroportuario.

Diversification Opportunities for AENA SME and Grupo Aeroportuario

0.0

Correlation Coefficient

AENA SME  Grupo Aeroportuario

Pay attention - limited upside

The 3 months correlation between AENA and Grupo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AENA SME UNSPADR110 and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del and AENA SME 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 AENA SME UNSPADR110 are associated (or correlated) with Grupo Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of AENA SME i.e., AENA SME and Grupo Aeroportuario go up and down completely randomly.

Pair Corralation between AENA SME and Grupo Aeroportuario

If you would invest (100.00) in Grupo Aeroportuario del on October 1, 2024 and sell it today you would earn a total of  100.00  from holding Grupo Aeroportuario del or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

AENA SME UNSPADR110  vs.  Grupo Aeroportuario del

AENA SME UNSPADR110

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days AENA SME UNSPADR110 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AENA SME is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Grupo Aeroportuario del

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Aeroportuario del are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Grupo Aeroportuario reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AENA SME and Grupo Aeroportuario

The main advantage of trading using opposite AENA SME and Grupo Aeroportuario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AENA SME position performs unexpectedly, Grupo Aeroportuario 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 Grupo Aeroportuario will offset losses from the drop in Grupo Aeroportuario's long position.

The idea behind AENA SME UNSPADR110 and Grupo Aeroportuario del 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 Stocks Directory module to find actively traded stocks across global markets.