Correlation Between Aena SME and Corporacion America
Can any of the company-specific risk be diversified away by investing in both Aena SME and Corporacion America 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 Corporacion America 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 Corporacion America Airports, you can compare the effects of market volatilities on Aena SME and Corporacion America 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 Corporacion America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SME and Corporacion America.
Diversification Opportunities for Aena SME and Corporacion America
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aena and Corporacion is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aena SME SA and Corporacion America Airports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacion America 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 Corporacion America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacion America has no effect on the direction of Aena SME i.e., Aena SME and Corporacion America go up and down completely randomly.
Pair Corralation between Aena SME and Corporacion America
Assuming the 90 days horizon Aena SME is expected to generate 1.32 times less return on investment than Corporacion America. But when comparing it to its historical volatility, Aena SME SA is 2.1 times less risky than Corporacion America. It trades about 0.22 of its potential returns per unit of risk. Corporacion America Airports is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,866 in Corporacion America Airports on November 1, 2024 and sell it today you would earn a total of 129.00 from holding Corporacion America Airports or generate 6.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aena SME SA vs. Corporacion America Airports
Performance |
| Timeline |
| Aena SME SA |
| Corporacion America |
Aena SME and Corporacion America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aena SME and Corporacion America
The main advantage of trading using opposite Aena SME and Corporacion America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aena SME position performs unexpectedly, Corporacion America 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 Corporacion America will offset losses from the drop in Corporacion America'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 |
| Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. AerSale Corp | Corporacion America vs. Flughafen Zrich AG |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |