Correlation Between Grupo Aeroportuario and Airports
Can any of the company-specific risk be diversified away by investing in both Grupo Aeroportuario 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 Grupo Aeroportuario and Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aeroportuario del and Airports of Thailand, you can compare the effects of market volatilities on Grupo Aeroportuario 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 Grupo Aeroportuario with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aeroportuario and Airports.
Diversification Opportunities for Grupo Aeroportuario and Airports
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grupo and Airports is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del 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 Grupo Aeroportuario 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 Grupo Aeroportuario del 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 Grupo Aeroportuario i.e., Grupo Aeroportuario and Airports go up and down completely randomly.
Pair Corralation between Grupo Aeroportuario and Airports
Assuming the 90 days horizon Grupo Aeroportuario is expected to generate 4.43 times less return on investment than Airports. But when comparing it to its historical volatility, Grupo Aeroportuario del is 1.78 times less risky than Airports. It trades about 0.02 of its potential returns per unit of risk. Airports of Thailand is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 80.00 in Airports of Thailand on November 9, 2024 and sell it today you would earn a total of 78.00 from holding Airports of Thailand or generate 97.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Aeroportuario del vs. Airports of Thailand
Performance |
| Timeline |
| Grupo Aeroportuario del |
| Airports of Thailand |
Grupo Aeroportuario and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aeroportuario and Airports
The main advantage of trading using opposite Grupo Aeroportuario and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aeroportuario 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.| Grupo Aeroportuario vs. DICKS Sporting Goods | Grupo Aeroportuario vs. Gaztransport Technigaz SA | Grupo Aeroportuario vs. JD SPORTS FASH | Grupo Aeroportuario vs. SPORTING |
| Airports vs. Japan Medical Dynamic | Airports vs. FIRST SHIP LEASE | Airports vs. ONWARD MEDICAL BV | Airports vs. Peijia Medical Limited |
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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