Correlation Between Aena SME and Blade Air

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

By analyzing existing cross correlation between Aena SME SA and Blade Air Mobility, you can compare the effects of market volatilities on Aena SME and Blade Air 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 Blade Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SME and Blade Air.

Diversification Opportunities for Aena SME and Blade Air

0.13

Correlation Coefficient

Aena SME  Blade Air

Average diversification

The 3 months correlation between Aena and Blade is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aena SME SA and Blade Air Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blade Air Mobility 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 SA are associated (or correlated) with Blade Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blade Air Mobility has no effect on the direction of Aena SME i.e., Aena SME and Blade Air go up and down completely randomly.

Pair Corralation between Aena SME and Blade Air

Assuming the 90 days horizon Aena SME SA is expected to under-perform the Blade Air. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aena SME SA is 4.27 times less risky than Blade Air. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Blade Air Mobility is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  311.00  in Blade Air Mobility on September 12, 2024 and sell it today you would earn a total of  121.00  from holding Blade Air Mobility or generate 38.91% return on investment over 90 days.

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

Aena SME SA  vs.  Blade Air Mobility

Aena SME SA

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Aena SME SA 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.

Blade Air Mobility

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blade Air Mobility are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Blade Air exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aena SME and Blade Air

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

The idea behind Aena SME SA and Blade Air Mobility 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.

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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.