Correlation Between Aenza SAA and Badger Infrastructure
Can any of the company-specific risk be diversified away by investing in both Aenza SAA and Badger Infrastructure 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 Aenza SAA and Badger Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aenza SAA and Badger Infrastructure Solutions, you can compare the effects of market volatilities on Aenza SAA and Badger Infrastructure 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 Aenza SAA with a short position of Badger Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aenza SAA and Badger Infrastructure.
Diversification Opportunities for Aenza SAA and Badger Infrastructure
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aenza and Badger is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aenza SAA and Badger Infrastructure Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger Infrastructure and Aenza SAA 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 Aenza SAA are associated (or correlated) with Badger Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger Infrastructure has no effect on the direction of Aenza SAA i.e., Aenza SAA and Badger Infrastructure go up and down completely randomly.
Pair Corralation between Aenza SAA and Badger Infrastructure
Given the investment horizon of 90 days Aenza SAA is expected to under-perform the Badger Infrastructure. But the stock apears to be less risky and, when comparing its historical volatility, Aenza SAA is 1.21 times less risky than Badger Infrastructure. The stock trades about -0.59 of its potential returns per unit of risk. The Badger Infrastructure Solutions is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,309 in Badger Infrastructure Solutions on September 12, 2024 and sell it today you would earn a total of 466.00 from holding Badger Infrastructure Solutions or generate 20.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.81% |
| Values | Daily Returns |
Aenza SAA vs. Badger Infrastructure Solution
Performance |
| Timeline |
| Aenza SAA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Badger Infrastructure |
Aenza SAA and Badger Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aenza SAA and Badger Infrastructure
The main advantage of trading using opposite Aenza SAA and Badger Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aenza SAA position performs unexpectedly, Badger Infrastructure 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 Badger Infrastructure will offset losses from the drop in Badger Infrastructure's long position.| Aenza SAA vs. Bowman Consulting Group | Aenza SAA vs. Api Group Corp | Aenza SAA vs. ACS Actividades de | Aenza SAA vs. ACS Actividades De |
| Badger Infrastructure vs. ACS Actividades De | Badger Infrastructure vs. Arcadis NV | Badger Infrastructure vs. Acciona SA | Badger Infrastructure vs. JGC Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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