Correlation Between Aena SME and Aeroports
Can any of the company-specific risk be diversified away by investing in both Aena SME and Aeroports 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 Aeroports 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 Aeroports de Paris, you can compare the effects of market volatilities on Aena SME and Aeroports 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 Aeroports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SME and Aeroports.
Diversification Opportunities for Aena SME and Aeroports
Excellent diversification
The 3 months correlation between Aena and Aeroports is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aena SME SA and Aeroports de Paris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroports de Paris 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 Aeroports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeroports de Paris has no effect on the direction of Aena SME i.e., Aena SME and Aeroports go up and down completely randomly.
Pair Corralation between Aena SME and Aeroports
Assuming the 90 days horizon Aena SME is expected to generate 1.49 times less return on investment than Aeroports. But when comparing it to its historical volatility, Aena SME SA is 1.27 times less risky than Aeroports. It trades about 0.04 of its potential returns per unit of risk. Aeroports de Paris is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10,800 in Aeroports de Paris on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Aeroports de Paris or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aena SME SA vs. Aeroports de Paris
Performance |
| Timeline |
| Aena SME SA |
| Aeroports de Paris |
Aena SME and Aeroports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aena SME and Aeroports
The main advantage of trading using opposite Aena SME and Aeroports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aena SME position performs unexpectedly, Aeroports 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 Aeroports will offset losses from the drop in Aeroports' long position.| Aena SME vs. CeoTronics AG | Aena SME vs. REVO INSURANCE SPA | Aena SME vs. Webster Financial | Aena SME vs. Mizuho Financial Group |
| Aeroports vs. ANTA SPORTS PRODUCT | Aeroports vs. Cleanaway Waste Management | Aeroports vs. GRUPO CARSO A1 | Aeroports vs. ePlay Digital |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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