Correlation Between Grupo Aeroportuario and Arca Continental
Can any of the company-specific risk be diversified away by investing in both Grupo Aeroportuario and Arca Continental 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 Grupo Aeroportuario and Arca Continental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aeroportuario del and Arca Continental SAB, you can compare the effects of market volatilities on Grupo Aeroportuario and Arca Continental 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 Grupo Aeroportuario with a short position of Arca Continental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aeroportuario and Arca Continental.
Diversification Opportunities for Grupo Aeroportuario and Arca Continental
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grupo and Arca is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and Arca Continental SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arca Continental SAB and Grupo Aeroportuario 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 Grupo Aeroportuario del are associated (or correlated) with Arca Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arca Continental SAB has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and Arca Continental go up and down completely randomly.
Pair Corralation between Grupo Aeroportuario and Arca Continental
Assuming the 90 days trading horizon Grupo Aeroportuario del is expected to under-perform the Arca Continental. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Aeroportuario del is 1.38 times less risky than Arca Continental. The stock trades about -0.18 of its potential returns per unit of risk. The Arca Continental SAB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 17,588 in Arca Continental SAB on August 28, 2024 and sell it today you would earn a total of 24.00 from holding Arca Continental SAB or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Aeroportuario del vs. Arca Continental SAB
Performance |
| Timeline |
| Grupo Aeroportuario del |
| Arca Continental SAB |
Grupo Aeroportuario and Arca Continental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aeroportuario and Arca Continental
The main advantage of trading using opposite Grupo Aeroportuario and Arca Continental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aeroportuario position performs unexpectedly, Arca Continental 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 Arca Continental will offset losses from the drop in Arca Continental's long position.| Grupo Aeroportuario vs. Grupo Financiero Inbursa | Grupo Aeroportuario vs. Kimberly Clark de Mxico | Grupo Aeroportuario vs. Grupo Televisa SAB | Grupo Aeroportuario vs. Grupo Bimbo SAB |
| Arca Continental vs. Alfa SAB de | Arca Continental vs. Grupo Financiero Banorte | Arca Continental vs. Fomento Econmico Mexicano | Arca Continental vs. Grupo Mxico SAB |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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