Correlation Between Aena SME and SIA Engineering
Can any of the company-specific risk be diversified away by investing in both Aena SME and SIA Engineering 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 SIA Engineering 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 SIA Engineering, you can compare the effects of market volatilities on Aena SME and SIA Engineering 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 SIA Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aena SME and SIA Engineering.
Diversification Opportunities for Aena SME and SIA Engineering
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aena and SIA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aena SME SA and SIA Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIA Engineering 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 SIA Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIA Engineering has no effect on the direction of Aena SME i.e., Aena SME and SIA Engineering go up and down completely randomly.
Pair Corralation between Aena SME and SIA Engineering
Assuming the 90 days horizon Aena SME SA is expected to under-perform the SIA Engineering. In addition to that, Aena SME is 7.19 times more volatile than SIA Engineering. It trades about -0.02 of its total potential returns per unit of risk. SIA Engineering is currently generating about 0.22 per unit of volatility. If you would invest 1,729 in SIA Engineering on September 3, 2024 and sell it today you would earn a total of 15.00 from holding SIA Engineering or generate 0.87% 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. SIA Engineering
Performance |
| Timeline |
| Aena SME SA |
| SIA Engineering |
Aena SME and SIA Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aena SME and SIA Engineering
The main advantage of trading using opposite Aena SME and SIA Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aena SME position performs unexpectedly, SIA Engineering 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 SIA Engineering will offset losses from the drop in SIA Engineering's long position.| Aena SME vs. Aeroports de Paris | Aena SME vs. Grupo Aeroportuario del | Aena SME vs. SPACE | Aena SME vs. Bayview Acquisition Corp |
| SIA Engineering vs. Aena SME SA | SIA Engineering vs. SPACE | SIA Engineering vs. Bayview Acquisition Corp | SIA Engineering vs. T Rowe Price |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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