Correlation Between Alfa SAB and Grupo Aeroportuario
Can any of the company-specific risk be diversified away by investing in both Alfa SAB and Grupo Aeroportuario 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 Alfa SAB and Grupo Aeroportuario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa SAB de and Grupo Aeroportuario del, you can compare the effects of market volatilities on Alfa SAB and Grupo Aeroportuario 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 Alfa SAB with a short position of Grupo Aeroportuario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa SAB and Grupo Aeroportuario.
Diversification Opportunities for Alfa SAB and Grupo Aeroportuario
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alfa and Grupo is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alfa SAB de and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del and Alfa SAB 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 Alfa SAB de are associated (or correlated) with Grupo Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of Alfa SAB i.e., Alfa SAB and Grupo Aeroportuario go up and down completely randomly.
Pair Corralation between Alfa SAB and Grupo Aeroportuario
Assuming the 90 days trading horizon Alfa SAB de is expected to generate 1.14 times more return on investment than Grupo Aeroportuario. However, Alfa SAB is 1.14 times more volatile than Grupo Aeroportuario del. It trades about 0.25 of its potential returns per unit of risk. Grupo Aeroportuario del is currently generating about 0.18 per unit of risk. If you would invest 1,500 in Alfa SAB de on October 25, 2024 and sell it today you would earn a total of 129.00 from holding Alfa SAB de or generate 8.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa SAB de vs. Grupo Aeroportuario del
Performance |
| Timeline |
| Alfa SAB de |
| Grupo Aeroportuario del |
Alfa SAB and Grupo Aeroportuario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa SAB and Grupo Aeroportuario
The main advantage of trading using opposite Alfa SAB and Grupo Aeroportuario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa SAB position performs unexpectedly, Grupo Aeroportuario 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 Grupo Aeroportuario will offset losses from the drop in Grupo Aeroportuario's long position.| Alfa SAB vs. Grupo Mxico SAB | Alfa SAB vs. Grupo Financiero Banorte | Alfa SAB vs. Fomento Econmico Mexicano | Alfa SAB vs. CEMEX SAB de |
| Grupo Aeroportuario vs. Grupo Aeroportuario del | Grupo Aeroportuario vs. Grupo Aeroportuario del | Grupo Aeroportuario vs. Gruma SAB de | Grupo Aeroportuario vs. Kimberly Clark de Mxico |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |