Correlation Between Aena SME and KIN

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

Diversification Opportunities for Aena SME and KIN

-0.29

Correlation Coefficient

Aena SME  KIN

Very good diversification

The 3 months correlation between Aena and KIN is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aena SME SA and KIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIN 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 KIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIN has no effect on the direction of Aena SME i.e., Aena SME and KIN go up and down completely randomly.

Pair Corralation between Aena SME and KIN

Assuming the 90 days horizon Aena SME is expected to generate 5.12 times less return on investment than KIN. But when comparing it to its historical volatility, Aena SME SA is 6.01 times less risky than KIN. It trades about 0.07 of its potential returns per unit of risk. KIN is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.00  in KIN on September 5, 2024 and sell it today you would earn a total of  0.00  from holding KIN or generate 44.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.53%
Values	Daily Returns

Aena SME SA  vs.  KIN

Aena SME SA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aena SME SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Aena SME may actually be approaching a critical reversion point that can send shares even higher in January 2025.

KIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KIN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for KIN shareholders.

Pair Trading with Aena SME and KIN

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

The idea behind Aena SME SA and KIN 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..