Correlation Between Aena SA and Grifols SA
Can any of the company-specific risk be diversified away by investing in both Aena SA and Grifols 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 Grifols 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 Grifols SA, you can compare the effects of market volatilities on Aena SA and Grifols 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 Grifols SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SA and Grifols SA.
Diversification Opportunities for Aena SA and Grifols SA
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aena and Grifols is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aena SA and Grifols SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grifols 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 Grifols SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grifols SA has no effect on the direction of Aena SA i.e., Aena SA and Grifols SA go up and down completely randomly.
Pair Corralation between Aena SA and Grifols SA
Assuming the 90 days trading horizon Aena SA is expected to under-perform the Grifols SA. But the stock apears to be less risky and, when comparing its historical volatility, Aena SA is 2.56 times less risky than Grifols SA. The stock trades about -0.1 of its potential returns per unit of risk. The Grifols SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,025 in Grifols SA on August 26, 2024 and sell it today you would earn a total of 35.00 from holding Grifols SA or generate 3.41% 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. Grifols SA
Performance |
| Timeline |
| Aena SA |
| Grifols SA |
Aena SA and Grifols SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aena SA and Grifols SA
The main advantage of trading using opposite Aena SA and Grifols SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aena SA position performs unexpectedly, Grifols 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 Grifols SA will offset losses from the drop in Grifols SA's long position.| Aena SA vs. Hispanotels Inversiones SOCIMI | Aena SA vs. Azaria Rental SOCIMI | Aena SA vs. Inhome Prime Properties | Aena SA vs. Bankinter |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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