Correlation Between Aena SA and Azaria Rental
Can any of the company-specific risk be diversified away by investing in both Aena SA and Azaria Rental 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 Azaria Rental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aena SA and Azaria Rental SOCIMI, you can compare the effects of market volatilities on Aena SA and Azaria Rental 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 Azaria Rental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SA and Azaria Rental.
Diversification Opportunities for Aena SA and Azaria Rental
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aena and Azaria is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Aena SA and Azaria Rental SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azaria Rental SOCIMI 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 Azaria Rental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azaria Rental SOCIMI has no effect on the direction of Aena SA i.e., Aena SA and Azaria Rental go up and down completely randomly.
Pair Corralation between Aena SA and Azaria Rental
Assuming the 90 days trading horizon Aena SA is expected to generate 1.26 times more return on investment than Azaria Rental. However, Aena SA is 1.26 times more volatile than Azaria Rental SOCIMI. It trades about 0.05 of its potential returns per unit of risk. Azaria Rental SOCIMI is currently generating about -0.21 per unit of risk. If you would invest 20,300 in Aena SA on September 1, 2024 and sell it today you would earn a total of 180.00 from holding Aena SA or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aena SA vs. Azaria Rental SOCIMI
Performance |
| Timeline |
| Aena SA |
| Azaria Rental SOCIMI |
Aena SA and Azaria Rental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aena SA and Azaria Rental
The main advantage of trading using opposite Aena SA and Azaria Rental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aena SA position performs unexpectedly, Azaria Rental 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 Azaria Rental will offset losses from the drop in Azaria Rental's long position.The idea behind Aena SA and Azaria Rental SOCIMI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Azaria Rental vs. Airbus Group SE | Azaria Rental vs. Industria de Diseno | Azaria Rental vs. Vale SA | Azaria Rental vs. Iberdrola 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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