Correlation Between Beijing Capital and Grupo Aeroportuario
Can any of the company-specific risk be diversified away by investing in both Beijing Capital and Grupo Aeroportuario 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 Beijing Capital and Grupo Aeroportuario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Capital International and Grupo Aeroportuario del, you can compare the effects of market volatilities on Beijing Capital and Grupo Aeroportuario 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 Beijing Capital with a short position of Grupo Aeroportuario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Capital and Grupo Aeroportuario.
Diversification Opportunities for Beijing Capital and Grupo Aeroportuario
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Beijing and Grupo is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Capital International and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del and Beijing Capital 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 Beijing Capital International are associated (or correlated) with Grupo Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of Beijing Capital i.e., Beijing Capital and Grupo Aeroportuario go up and down completely randomly.
Pair Corralation between Beijing Capital and Grupo Aeroportuario
Assuming the 90 days horizon Beijing Capital International is expected to generate 4.72 times more return on investment than Grupo Aeroportuario. However, Beijing Capital is 4.72 times more volatile than Grupo Aeroportuario del. It trades about 0.04 of its potential returns per unit of risk. Grupo Aeroportuario del is currently generating about -0.08 per unit of risk. If you would invest 31.00 in Beijing Capital International on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Beijing Capital International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Capital International vs. Grupo Aeroportuario del
Performance |
| Timeline |
| Beijing Capital Inte |
| Grupo Aeroportuario del |
Beijing Capital and Grupo Aeroportuario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Capital and Grupo Aeroportuario
The main advantage of trading using opposite Beijing Capital and Grupo Aeroportuario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Capital position performs unexpectedly, Grupo Aeroportuario 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 Grupo Aeroportuario will offset losses from the drop in Grupo Aeroportuario's long position.| Beijing Capital vs. Grupo Aeroportuario del | Beijing Capital vs. Grupo Aeroportuario del | Beijing Capital vs. Grupo Aeroportuario del | Beijing Capital vs. AerSale Corp |
| Grupo Aeroportuario vs. Grupo Aeroportuario del | Grupo Aeroportuario vs. Corporacion America Airports | Grupo Aeroportuario vs. AerSale Corp | Grupo Aeroportuario vs. Aeroports de Paris |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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