Correlation Between Arteche Lantegi and Aena SA
Can any of the company-specific risk be diversified away by investing in both Arteche Lantegi and Aena SA 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 Arteche Lantegi and Aena SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arteche Lantegi Elkartea and Aena SA, you can compare the effects of market volatilities on Arteche Lantegi and Aena SA 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 Arteche Lantegi with a short position of Aena SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arteche Lantegi and Aena SA.
Diversification Opportunities for Arteche Lantegi and Aena SA
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arteche and Aena is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Arteche Lantegi Elkartea and Aena SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SA and Arteche Lantegi 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 Arteche Lantegi Elkartea are associated (or correlated) with Aena SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SA has no effect on the direction of Arteche Lantegi i.e., Arteche Lantegi and Aena SA go up and down completely randomly.
Pair Corralation between Arteche Lantegi and Aena SA
Assuming the 90 days trading horizon Arteche Lantegi Elkartea is expected to generate 2.89 times more return on investment than Aena SA. However, Arteche Lantegi is 2.89 times more volatile than Aena SA. It trades about 0.05 of its potential returns per unit of risk. Aena SA is currently generating about 0.0 per unit of risk. If you would invest 630.00 in Arteche Lantegi Elkartea on August 31, 2024 and sell it today you would earn a total of 15.00 from holding Arteche Lantegi Elkartea or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arteche Lantegi Elkartea vs. Aena SA
Performance |
| Timeline |
| Arteche Lantegi Elkartea |
| Aena SA |
Arteche Lantegi and Aena SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arteche Lantegi and Aena SA
The main advantage of trading using opposite Arteche Lantegi and Aena SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arteche Lantegi position performs unexpectedly, Aena SA 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 Aena SA will offset losses from the drop in Aena SA's long position.| Arteche Lantegi vs. Lyxor UCITS Ibex35 | Arteche Lantegi vs. Metrovacesa SA | Arteche Lantegi vs. Hispanotels Inversiones SOCIMI | Arteche Lantegi vs. Mapfre |
| Aena SA vs. NH Hoteles | Aena SA vs. Plasticos Compuestos SA | Aena SA vs. Tier1 Technology SA | Aena SA vs. Arteche Lantegi Elkartea |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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