Correlation Between Aena SME and SPACE

Can any of the company-specific risk be diversified away by investing in both Aena SME and SPACE 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 SPACE 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 SPACE, you can compare the effects of market volatilities on Aena SME and SPACE 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 SPACE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SME and SPACE.

Diversification Opportunities for Aena SME and SPACE

-0.21

Correlation Coefficient

Aena SME  SPACE

Very good diversification

The 3 months correlation between Aena and SPACE is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aena SME SA and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE 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 SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of Aena SME i.e., Aena SME and SPACE go up and down completely randomly.

Pair Corralation between Aena SME and SPACE

Assuming the 90 days horizon Aena SME SA is expected to under-perform the SPACE. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aena SME SA is 4.41 times less risky than SPACE. The pink sheet trades about -0.02 of its potential returns per unit of risk. The SPACE is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  35.00  in SPACE on September 13, 2024 and sell it today you would earn a total of  20.00  from holding SPACE or generate 57.14% return on investment over 90 days.

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

Aena SME SA  vs.  SPACE

Aena SME SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aena SME SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Aena SME is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SPACE

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPACE are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, SPACE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aena SME and SPACE

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

The idea behind Aena SME SA and SPACE 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 Global Correlations module to find global opportunities by holding instruments from different markets.