Correlation Between Bellring Brands and Aena SA
Can any of the company-specific risk be diversified away by investing in both Bellring Brands 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 Bellring Brands and Aena SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bellring Brands LLC and Aena SA, you can compare the effects of market volatilities on Bellring Brands 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 Bellring Brands with a short position of Aena SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bellring Brands and Aena SA.
Diversification Opportunities for Bellring Brands and Aena SA
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bellring and Aena is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bellring Brands LLC and Aena SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SA and Bellring Brands 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 Bellring Brands LLC 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 Bellring Brands i.e., Bellring Brands and Aena SA go up and down completely randomly.
Pair Corralation between Bellring Brands and Aena SA
Given the investment horizon of 90 days Bellring Brands LLC is expected to generate 1.37 times more return on investment than Aena SA. However, Bellring Brands is 1.37 times more volatile than Aena SA. It trades about 0.68 of its potential returns per unit of risk. Aena SA is currently generating about -0.13 per unit of risk. If you would invest 6,510 in Bellring Brands LLC on August 29, 2024 and sell it today you would earn a total of 1,369 from holding Bellring Brands LLC or generate 21.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bellring Brands LLC vs. Aena SA
Performance |
| Timeline |
| Bellring Brands LLC |
| Aena SA |
Bellring Brands and Aena SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bellring Brands and Aena SA
The main advantage of trading using opposite Bellring Brands and Aena SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bellring Brands 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.| Bellring Brands vs. Treehouse Foods | Bellring Brands vs. Pilgrims Pride Corp | Bellring Brands vs. Ingredion Incorporated | Bellring Brands vs. JM Smucker |
| Aena SA vs. NH Hoteles | Aena SA vs. All Iron Re | Aena SA vs. Caixabank SA | Aena SA vs. Home Capital Rentals |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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