Correlation Between Aena SME and HomeToGo
Can any of the company-specific risk be diversified away by investing in both Aena SME and HomeToGo 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 HomeToGo 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 HomeToGo SE, you can compare the effects of market volatilities on Aena SME and HomeToGo 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 HomeToGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SME and HomeToGo.
Diversification Opportunities for Aena SME and HomeToGo
Very weak diversification
The 3 months correlation between Aena and HomeToGo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aena SME SA and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo SE 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 HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of Aena SME i.e., Aena SME and HomeToGo go up and down completely randomly.
Pair Corralation between Aena SME and HomeToGo
Assuming the 90 days horizon Aena SME SA is expected to under-perform the HomeToGo. But the stock apears to be less risky and, when comparing its historical volatility, Aena SME SA is 2.63 times less risky than HomeToGo. The stock trades about -0.03 of its potential returns per unit of risk. The HomeToGo SE is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 213.00 in HomeToGo SE on September 12, 2024 and sell it today you would earn a total of 1.00 from holding HomeToGo SE or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aena SME SA vs. HomeToGo SE
Performance |
| Timeline |
| Aena SME SA |
| HomeToGo SE |
Aena SME and HomeToGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aena SME and HomeToGo
The main advantage of trading using opposite Aena SME and HomeToGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aena SME position performs unexpectedly, HomeToGo 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 HomeToGo will offset losses from the drop in HomeToGo's long position.| Aena SME vs. Air Transport Services | Aena SME vs. IMAGIN MEDICAL INC | Aena SME vs. NTG Nordic Transport | Aena SME vs. ONWARD MEDICAL BV |
| HomeToGo vs. Tencent Holdings | HomeToGo vs. Superior Plus Corp | HomeToGo vs. SIVERS SEMICONDUCTORS AB | HomeToGo vs. NorAm Drilling AS |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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