Correlation Between Auckland International and Aena SME
Can any of the company-specific risk be diversified away by investing in both Auckland International and Aena SME 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 Auckland International and Aena SME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auckland International Airport and Aena SME SA, you can compare the effects of market volatilities on Auckland International and Aena SME 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 Auckland International with a short position of Aena SME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auckland International and Aena SME.
Diversification Opportunities for Auckland International and Aena SME
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Auckland and Aena is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Auckland International Airport and Aena SME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SME SA and Auckland International 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 Auckland International Airport are associated (or correlated) with Aena SME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SME SA has no effect on the direction of Auckland International i.e., Auckland International and Aena SME go up and down completely randomly.
Pair Corralation between Auckland International and Aena SME
Assuming the 90 days horizon Auckland International Airport is expected to generate 3.17 times more return on investment than Aena SME. However, Auckland International is 3.17 times more volatile than Aena SME SA. It trades about 0.12 of its potential returns per unit of risk. Aena SME SA is currently generating about 0.22 per unit of risk. If you would invest 2,183 in Auckland International Airport on November 1, 2024 and sell it today you would earn a total of 175.00 from holding Auckland International Airport or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Auckland International Airport vs. Aena SME SA
Performance |
| Timeline |
| Auckland International |
| Aena SME SA |
Auckland International and Aena SME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auckland International and Aena SME
The main advantage of trading using opposite Auckland International and Aena SME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auckland International position performs unexpectedly, Aena SME 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 SME will offset losses from the drop in Aena SME's long position.| Auckland International vs. Aeroports de Paris | Auckland International vs. Airports of Thailand | Auckland International vs. Saker Aviation Services | Auckland International vs. Japan Airport Terminal |
| Aena SME vs. Auckland International Airport | Aena SME vs. Airports of Thailand | Aena SME vs. Aeroports de Paris | Aena SME vs. AerSale Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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