Correlation Between Amadeus IT and Realia
Can any of the company-specific risk be diversified away by investing in both Amadeus IT and Realia 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 Amadeus IT and Realia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amadeus IT Group and Realia, you can compare the effects of market volatilities on Amadeus IT and Realia 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 Amadeus IT with a short position of Realia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amadeus IT and Realia.
Diversification Opportunities for Amadeus IT and Realia
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amadeus and Realia is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Amadeus IT Group and Realia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realia and Amadeus IT 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 Amadeus IT Group are associated (or correlated) with Realia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realia has no effect on the direction of Amadeus IT i.e., Amadeus IT and Realia go up and down completely randomly.
Pair Corralation between Amadeus IT and Realia
Assuming the 90 days trading horizon Amadeus IT Group is expected to under-perform the Realia. In addition to that, Amadeus IT is 1.27 times more volatile than Realia. It trades about -0.13 of its total potential returns per unit of risk. Realia is currently generating about -0.14 per unit of volatility. If you would invest 97.00 in Realia on January 19, 2025 and sell it today you would lose (7.00) from holding Realia or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amadeus IT Group vs. Realia
Performance |
| Timeline |
| Amadeus IT Group |
| Realia |
Amadeus IT and Realia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amadeus IT and Realia
The main advantage of trading using opposite Amadeus IT and Realia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amadeus IT position performs unexpectedly, Realia 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 Realia will offset losses from the drop in Realia's long position.| Amadeus IT vs. Aena SA | Amadeus IT vs. Grifols SA | Amadeus IT vs. Industria de Diseno | Amadeus IT vs. Ferrovial SA |
| Realia vs. Technomeca Aerospace SA | Realia vs. Biotechnology Assets SA | Realia vs. Borges Agricultural Industrial | Realia vs. Caixabank 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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