Correlation Between Aena SA and Amadeus IT
Can any of the company-specific risk be diversified away by investing in both Aena SA and Amadeus IT 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 SA and Amadeus IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aena SA and Amadeus IT Group, you can compare the effects of market volatilities on Aena SA and Amadeus IT 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 SA with a short position of Amadeus IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SA and Amadeus IT.
Diversification Opportunities for Aena SA and Amadeus IT
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aena and Amadeus is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Aena SA and Amadeus IT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amadeus IT Group and Aena SA 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 SA are associated (or correlated) with Amadeus IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amadeus IT Group has no effect on the direction of Aena SA i.e., Aena SA and Amadeus IT go up and down completely randomly.
Pair Corralation between Aena SA and Amadeus IT
Assuming the 90 days trading horizon Aena SA is expected to generate 0.9 times more return on investment than Amadeus IT. However, Aena SA is 1.11 times less risky than Amadeus IT. It trades about 0.1 of its potential returns per unit of risk. Amadeus IT Group is currently generating about 0.01 per unit of risk. If you would invest 13,751 in Aena SA on August 31, 2024 and sell it today you would earn a total of 6,729 from holding Aena SA or generate 48.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aena SA vs. Amadeus IT Group
Performance |
| Timeline |
| Aena SA |
| Amadeus IT Group |
Aena SA and Amadeus IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aena SA and Amadeus IT
The main advantage of trading using opposite Aena SA and Amadeus IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aena SA position performs unexpectedly, Amadeus IT 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 Amadeus IT will offset losses from the drop in Amadeus IT's long position.| Aena SA vs. NH Hoteles | Aena SA vs. Plasticos Compuestos SA | Aena SA vs. Tier1 Technology SA | Aena SA vs. Arteche Lantegi Elkartea |
| Amadeus IT vs. Aena SA | Amadeus IT vs. Grifols SA | Amadeus IT vs. Industria de Diseno | Amadeus IT vs. Ferrovial |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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