Correlation Between Grupo Aeroportuario and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both Grupo Aeroportuario and GEELY AUTOMOBILE 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 Grupo Aeroportuario and GEELY AUTOMOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aeroportuario del and GEELY AUTOMOBILE, you can compare the effects of market volatilities on Grupo Aeroportuario and GEELY AUTOMOBILE 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 Grupo Aeroportuario with a short position of GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aeroportuario and GEELY AUTOMOBILE.
Diversification Opportunities for Grupo Aeroportuario and GEELY AUTOMOBILE
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grupo and GEELY is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE and Grupo Aeroportuario 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 Grupo Aeroportuario del are associated (or correlated) with GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between Grupo Aeroportuario and GEELY AUTOMOBILE
Assuming the 90 days trading horizon Grupo Aeroportuario del is expected to generate 0.81 times more return on investment than GEELY AUTOMOBILE. However, Grupo Aeroportuario del is 1.24 times less risky than GEELY AUTOMOBILE. It trades about 0.1 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about -0.13 per unit of risk. If you would invest 24,800 in Grupo Aeroportuario del on October 25, 2024 and sell it today you would earn a total of 600.00 from holding Grupo Aeroportuario del or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Grupo Aeroportuario del vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| Grupo Aeroportuario del |
| GEELY AUTOMOBILE |
Grupo Aeroportuario and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aeroportuario and GEELY AUTOMOBILE
The main advantage of trading using opposite Grupo Aeroportuario and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aeroportuario position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| Grupo Aeroportuario vs. BJs Restaurants | Grupo Aeroportuario vs. Sterling Construction | Grupo Aeroportuario vs. Corsair Gaming | Grupo Aeroportuario vs. PENN NATL GAMING |
| GEELY AUTOMOBILE vs. NIGHTINGALE HEALTH EO | GEELY AUTOMOBILE vs. Cardinal Health | GEELY AUTOMOBILE vs. Iridium Communications | GEELY AUTOMOBILE vs. National Health Investors |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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