Correlation Between Acerinox and Aena SA
Can any of the company-specific risk be diversified away by investing in both Acerinox and Aena SA 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 Acerinox and Aena SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acerinox and Aena SA, you can compare the effects of market volatilities on Acerinox and Aena SA 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 Acerinox with a short position of Aena SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acerinox and Aena SA.
Diversification Opportunities for Acerinox and Aena SA
Very good diversification
The 3 months correlation between Acerinox and Aena is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Acerinox and Aena SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SA and Acerinox 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 Acerinox are associated (or correlated) with Aena SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SA has no effect on the direction of Acerinox i.e., Acerinox and Aena SA go up and down completely randomly.
Pair Corralation between Acerinox and Aena SA
Assuming the 90 days trading horizon Acerinox is expected to generate 3.82 times less return on investment than Aena SA. In addition to that, Acerinox is 1.27 times more volatile than Aena SA. It trades about 0.03 of its total potential returns per unit of risk. Aena SA is currently generating about 0.14 per unit of volatility. If you would invest 13,104 in Aena SA on August 25, 2024 and sell it today you would earn a total of 6,936 from holding Aena SA or generate 52.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acerinox vs. Aena SA
Performance |
| Timeline |
| Acerinox |
| Aena SA |
Acerinox and Aena SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acerinox and Aena SA
The main advantage of trading using opposite Acerinox and Aena SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acerinox position performs unexpectedly, Aena SA 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 Aena SA will offset losses from the drop in Aena SA's long position.| Acerinox vs. ACS Actividades de | Acerinox vs. ArcelorMittal SA | Acerinox vs. Mapfre | Acerinox vs. Ferrovial |
| Aena SA vs. Borges Agricultural Industrial | Aena SA vs. NH Hoteles | Aena SA vs. All Iron Re | Aena SA vs. Hispanotels Inversiones SOCIMI |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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