Correlation Between Corporacion America and SIA Engineering
Can any of the company-specific risk be diversified away by investing in both Corporacion America and SIA Engineering 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 SIA Engineering 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 SIA Engineering, you can compare the effects of market volatilities on Corporacion America and SIA Engineering 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 SIA Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporacion America and SIA Engineering.
Diversification Opportunities for Corporacion America and SIA Engineering
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Corporacion and SIA is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Corporacion America Airports and SIA Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIA Engineering 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 SIA Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIA Engineering has no effect on the direction of Corporacion America i.e., Corporacion America and SIA Engineering go up and down completely randomly.
Pair Corralation between Corporacion America and SIA Engineering
Given the investment horizon of 90 days Corporacion America is expected to generate 1.08 times less return on investment than SIA Engineering. In addition to that, Corporacion America is 14.31 times more volatile than SIA Engineering. It trades about 0.01 of its total potential returns per unit of risk. SIA Engineering is currently generating about 0.21 per unit of volatility. If you would invest 1,729 in SIA Engineering on September 1, 2024 and sell it today you would earn a total of 15.00 from holding SIA Engineering or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Corporacion America Airports vs. SIA Engineering
Performance |
| Timeline |
| Corporacion America |
| SIA Engineering |
Corporacion America and SIA Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporacion America and SIA Engineering
The main advantage of trading using opposite Corporacion America and SIA Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporacion America position performs unexpectedly, SIA Engineering 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 SIA Engineering will offset losses from the drop in SIA Engineering's 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 |
| SIA Engineering vs. Ihuman Inc | SIA Engineering vs. Old Republic International | SIA Engineering vs. Crombie Real Estate | SIA Engineering vs. Fidus Investment 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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