Correlation Between Aena SA and Ferrovial
Can any of the company-specific risk be diversified away by investing in both Aena SA and Ferrovial 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 Ferrovial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aena SA and Ferrovial SA, you can compare the effects of market volatilities on Aena SA and Ferrovial 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 Ferrovial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SA and Ferrovial.
Diversification Opportunities for Aena SA and Ferrovial
Modest diversification
The 3 months correlation between Aena and Ferrovial is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aena SA and Ferrovial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrovial 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 Ferrovial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrovial SA has no effect on the direction of Aena SA i.e., Aena SA and Ferrovial go up and down completely randomly.
Pair Corralation between Aena SA and Ferrovial
Assuming the 90 days trading horizon Aena SA is expected to generate 0.85 times more return on investment than Ferrovial. However, Aena SA is 1.18 times less risky than Ferrovial. It trades about 0.14 of its potential returns per unit of risk. Ferrovial SA is currently generating about 0.05 per unit of risk. If you would invest 20,180 in Aena SA on November 3, 2024 and sell it today you would earn a total of 660.00 from holding Aena SA or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aena SA vs. Ferrovial SA
Performance |
| Timeline |
| Aena SA |
| Ferrovial SA |
Aena SA and Ferrovial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aena SA and Ferrovial
The main advantage of trading using opposite Aena SA and Ferrovial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aena SA position performs unexpectedly, Ferrovial 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 Ferrovial will offset losses from the drop in Ferrovial's long position.| Aena SA vs. Home Capital Rentals | Aena SA vs. Tier1 Technology SA | Aena SA vs. Cellnex Telecom SA | Aena SA vs. Squirrel Media SA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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