Correlation Between Aena SME and Airports
Can any of the company-specific risk be diversified away by investing in both Aena SME and Airports 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 Airports 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 Airports of Thailand, you can compare the effects of market volatilities on Aena SME and Airports 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 Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SME and Airports.
Diversification Opportunities for Aena SME and Airports
Very weak diversification
The 3 months correlation between Aena and Airports is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aena SME SA and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand 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 Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of Aena SME i.e., Aena SME and Airports go up and down completely randomly.
Pair Corralation between Aena SME and Airports
Assuming the 90 days horizon Aena SME SA is expected to generate 0.3 times more return on investment than Airports. However, Aena SME SA is 3.3 times less risky than Airports. It trades about -0.23 of its potential returns per unit of risk. Airports of Thailand is currently generating about -0.08 per unit of risk. If you would invest 2,242 in Aena SME SA on August 28, 2024 and sell it today you would lose (133.00) from holding Aena SME SA or give up 5.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aena SME SA vs. Airports of Thailand
Performance |
| Timeline |
| Aena SME SA |
| Airports of Thailand |
Aena SME and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aena SME and Airports
The main advantage of trading using opposite Aena SME and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aena SME position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.| Aena SME vs. Aeroports de Paris | Aena SME vs. Corporacion America Airports | Aena SME vs. Grupo Aeroportuario del | Aena SME vs. Grupo Aeroportuario del |
| Airports vs. Aeroports de Paris | Airports vs. Japan Airport Terminal | Airports vs. Aena SME SA | Airports vs. Aena SME 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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