Correlation Between Aena SA and Enags SA
Can any of the company-specific risk be diversified away by investing in both Aena SA and Enags 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 Aena SA and Enags SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aena SA and Enags SA, you can compare the effects of market volatilities on Aena SA and Enags 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 Aena SA with a short position of Enags SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SA and Enags SA.
Diversification Opportunities for Aena SA and Enags SA
Excellent diversification
The 3 months correlation between Aena and Enags is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aena SA and Enags SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enags SA 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 Enags SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enags SA has no effect on the direction of Aena SA i.e., Aena SA and Enags SA go up and down completely randomly.
Pair Corralation between Aena SA and Enags SA
Assuming the 90 days trading horizon Aena SA is expected to generate 0.93 times more return on investment than Enags SA. However, Aena SA is 1.07 times less risky than Enags SA. It trades about 0.1 of its potential returns per unit of risk. Enags SA is currently generating about 0.02 per unit of risk. If you would invest 17,217 in Aena SA on September 3, 2024 and sell it today you would earn a total of 3,263 from holding Aena SA or generate 18.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aena SA vs. Enags SA
Performance |
| Timeline |
| Aena SA |
| Enags SA |
Aena SA and Enags SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aena SA and Enags SA
The main advantage of trading using opposite Aena SA and Enags SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aena SA position performs unexpectedly, Enags 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 Enags SA will offset losses from the drop in Enags SA's long position.| Aena SA vs. Parlem Telecom Companyia | Aena SA vs. Inhome Prime Properties | Aena SA vs. Tier1 Technology SA | 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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