Correlation Between Aena SME and Auckland International
Can any of the company-specific risk be diversified away by investing in both Aena SME and Auckland International 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 SME and Auckland International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aena SME SA and Auckland International Airport, you can compare the effects of market volatilities on Aena SME and Auckland International 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 SME with a short position of Auckland International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SME and Auckland International.
Diversification Opportunities for Aena SME and Auckland International
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aena and Auckland is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aena SME SA and Auckland International Airport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auckland International and Aena SME 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 SME SA are associated (or correlated) with Auckland International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auckland International has no effect on the direction of Aena SME i.e., Aena SME and Auckland International go up and down completely randomly.
Pair Corralation between Aena SME and Auckland International
Assuming the 90 days horizon Aena SME is expected to generate 1.73 times less return on investment than Auckland International. But when comparing it to its historical volatility, Aena SME SA is 3.17 times less risky than Auckland International. It trades about 0.22 of its potential returns per unit of risk. Auckland International Airport is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,183 in Auckland International Airport on November 1, 2024 and sell it today you would earn a total of 175.00 from holding Auckland International Airport or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Aena SME SA vs. Auckland International Airport
Performance |
| Timeline |
| Aena SME SA |
| Auckland International |
Aena SME and Auckland International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aena SME and Auckland International
The main advantage of trading using opposite Aena SME and Auckland International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aena SME position performs unexpectedly, Auckland International 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 Auckland International will offset losses from the drop in Auckland International's long position.| Aena SME vs. Auckland International Airport | Aena SME vs. Airports of Thailand | Aena SME vs. Aeroports de Paris | Aena SME vs. AerSale Corp |
| Auckland International vs. Aeroports de Paris | Auckland International vs. Airports of Thailand | Auckland International vs. Saker Aviation Services | Auckland International vs. Japan Airport Terminal |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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