Correlation Between Aena SA and Plasticos Compuestos
Can any of the company-specific risk be diversified away by investing in both Aena SA and Plasticos Compuestos 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 Plasticos Compuestos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aena SA and Plasticos Compuestos SA, you can compare the effects of market volatilities on Aena SA and Plasticos Compuestos 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 Plasticos Compuestos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SA and Plasticos Compuestos.
Diversification Opportunities for Aena SA and Plasticos Compuestos
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aena and Plasticos is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aena SA and Plasticos Compuestos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plasticos Compuestos 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 Plasticos Compuestos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plasticos Compuestos has no effect on the direction of Aena SA i.e., Aena SA and Plasticos Compuestos go up and down completely randomly.
Pair Corralation between Aena SA and Plasticos Compuestos
Assuming the 90 days trading horizon Aena SA is expected to generate 0.31 times more return on investment than Plasticos Compuestos. However, Aena SA is 3.23 times less risky than Plasticos Compuestos. It trades about 0.07 of its potential returns per unit of risk. Plasticos Compuestos SA is currently generating about 0.01 per unit of risk. If you would invest 14,288 in Aena SA on November 27, 2024 and sell it today you would earn a total of 7,012 from holding Aena SA or generate 49.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.82% |
| Values | Daily Returns |
Aena SA vs. Plasticos Compuestos SA
Performance |
| Timeline |
| Aena SA |
| Plasticos Compuestos |
Aena SA and Plasticos Compuestos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aena SA and Plasticos Compuestos
The main advantage of trading using opposite Aena SA and Plasticos Compuestos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aena SA position performs unexpectedly, Plasticos Compuestos 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 Plasticos Compuestos will offset losses from the drop in Plasticos Compuestos' long position.| Aena SA vs. Vytrus Biotech SA | Aena SA vs. Atresmedia Corporacin de | Aena SA vs. Biotechnology Assets SA | Aena SA vs. Borges Agricultural Industrial |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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