Correlation Between Flughafen Zürich and Aena SME
Can any of the company-specific risk be diversified away by investing in both Flughafen Zürich 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 Flughafen Zürich and Aena SME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flughafen Zrich AG and Aena SME SA, you can compare the effects of market volatilities on Flughafen Zürich 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 Flughafen Zürich with a short position of Aena SME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flughafen Zürich and Aena SME.
Diversification Opportunities for Flughafen Zürich and Aena SME
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Flughafen and Aena is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Flughafen Zrich AG 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 Flughafen Zürich 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 Flughafen Zrich AG 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 Flughafen Zürich i.e., Flughafen Zürich and Aena SME go up and down completely randomly.
Pair Corralation between Flughafen Zürich and Aena SME
Assuming the 90 days horizon Flughafen Zürich is expected to generate 1.74 times less return on investment than Aena SME. But when comparing it to its historical volatility, Flughafen Zrich AG is 1.19 times less risky than Aena SME. It trades about 0.04 of its potential returns per unit of risk. Aena SME SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,543 in Aena SME SA on August 27, 2024 and sell it today you would earn a total of 548.00 from holding Aena SME SA or generate 35.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flughafen Zrich AG vs. Aena SME SA
Performance |
| Timeline |
| Flughafen Zrich AG |
| Aena SME SA |
Flughafen Zürich and Aena SME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flughafen Zürich and Aena SME
The main advantage of trading using opposite Flughafen Zürich and Aena SME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flughafen Zürich 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.| Flughafen Zürich vs. Grupo Aeroportuario del | Flughafen Zürich vs. Grupo Aeroportuario del | Flughafen Zürich vs. Corporacion America Airports | Flughafen Zürich vs. AerSale Corp |
| Aena SME vs. Aeroports de Paris | Aena SME vs. Corporacion America Airports | Aena SME vs. Grupo Aeroportuario del | Aena SME vs. Grupo Aeroportuario del |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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