Correlation Between Aena SME and Japan Airport
Can any of the company-specific risk be diversified away by investing in both Aena SME and Japan Airport 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 Japan Airport 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 Japan Airport Terminal, you can compare the effects of market volatilities on Aena SME and Japan Airport 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 Japan Airport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SME and Japan Airport.
Diversification Opportunities for Aena SME and Japan Airport
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aena and Japan is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aena SME SA and Japan Airport Terminal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Airport Terminal 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 Japan Airport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Airport Terminal has no effect on the direction of Aena SME i.e., Aena SME and Japan Airport go up and down completely randomly.
Pair Corralation between Aena SME and Japan Airport
Assuming the 90 days horizon Aena SME SA is expected to generate 0.47 times more return on investment than Japan Airport. However, Aena SME SA is 2.11 times less risky than Japan Airport. It trades about 0.22 of its potential returns per unit of risk. Japan Airport Terminal is currently generating about -0.13 per unit of risk. If you would invest 2,041 in Aena SME SA on November 1, 2024 and sell it today you would earn a total of 120.00 from holding Aena SME SA or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aena SME SA vs. Japan Airport Terminal
Performance |
| Timeline |
| Aena SME SA |
| Japan Airport Terminal |
Aena SME and Japan Airport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aena SME and Japan Airport
The main advantage of trading using opposite Aena SME and Japan Airport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aena SME position performs unexpectedly, Japan Airport 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 Japan Airport will offset losses from the drop in Japan Airport's long position.| Aena SME vs. Auckland International Airport | Aena SME vs. Aeroports de Paris | Aena SME vs. Airports of Thailand | Aena SME vs. Saker Aviation Services |
| Japan Airport vs. Aeroports de Paris | Japan Airport vs. Aena SME SA | Japan Airport vs. Airports of Thailand | Japan Airport 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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