Correlation Between Corporacion America and Airports
Can any of the company-specific risk be diversified away by investing in both Corporacion America and Airports 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 Corporacion America and Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporacion America Airports and Airports of Thailand, you can compare the effects of market volatilities on Corporacion America and Airports 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 Corporacion America with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporacion America and Airports.
Diversification Opportunities for Corporacion America and Airports
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Corporacion and Airports is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Corporacion America Airports and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand and Corporacion America 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 Corporacion America Airports are associated (or correlated) with Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of Corporacion America i.e., Corporacion America and Airports go up and down completely randomly.
Pair Corralation between Corporacion America and Airports
Given the investment horizon of 90 days Corporacion America is expected to generate 1.67 times less return on investment than Airports. But when comparing it to its historical volatility, Corporacion America Airports is 3.91 times less risky than Airports. It trades about 0.08 of its potential returns per unit of risk. Airports of Thailand is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 209.00 in Airports of Thailand on August 25, 2024 and sell it today you would lose (84.00) from holding Airports of Thailand or give up 40.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.94% |
| Values | Daily Returns |
Corporacion America Airports vs. Airports of Thailand
Performance |
| Timeline |
| Corporacion America |
| Airports of Thailand |
Corporacion America and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporacion America and Airports
The main advantage of trading using opposite Corporacion America and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporacion America position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.| Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. AerSale Corp | Corporacion America vs. Flughafen Zrich AG |
| Airports vs. Auckland International Airport | Airports vs. Auckland International Airport | Airports vs. Aena SME SA | Airports vs. Aena SME SA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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