Correlation Between Graham Holdings and Grupo Aeroportuario
Can any of the company-specific risk be diversified away by investing in both Graham Holdings and Grupo Aeroportuario 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 Graham Holdings and Grupo Aeroportuario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graham Holdings Co and Grupo Aeroportuario del, you can compare the effects of market volatilities on Graham Holdings and Grupo Aeroportuario 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 Graham Holdings with a short position of Grupo Aeroportuario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graham Holdings and Grupo Aeroportuario.
Diversification Opportunities for Graham Holdings and Grupo Aeroportuario
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Graham and Grupo is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Graham Holdings Co and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del and Graham Holdings 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 Graham Holdings Co are associated (or correlated) with Grupo Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of Graham Holdings i.e., Graham Holdings and Grupo Aeroportuario go up and down completely randomly.
Pair Corralation between Graham Holdings and Grupo Aeroportuario
Considering the 90-day investment horizon Graham Holdings is expected to generate 1.3 times less return on investment than Grupo Aeroportuario. But when comparing it to its historical volatility, Graham Holdings Co is 1.12 times less risky than Grupo Aeroportuario. It trades about 0.28 of its potential returns per unit of risk. Grupo Aeroportuario del is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 25,950 in Grupo Aeroportuario del on November 2, 2024 and sell it today you would earn a total of 2,631 from holding Grupo Aeroportuario del or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graham Holdings Co vs. Grupo Aeroportuario del
Performance |
| Timeline |
| Graham Holdings |
| Grupo Aeroportuario del |
Graham Holdings and Grupo Aeroportuario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graham Holdings and Grupo Aeroportuario
The main advantage of trading using opposite Graham Holdings and Grupo Aeroportuario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graham Holdings position performs unexpectedly, Grupo Aeroportuario 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 Grupo Aeroportuario will offset losses from the drop in Grupo Aeroportuario's long position.| Graham Holdings vs. Cable One | Graham Holdings vs. Adtalem Global Education | Graham Holdings vs. Axalta Coating Systems | Graham Holdings vs. Madison Square Garden |
| Grupo Aeroportuario vs. Grupo Aeroportuario del | Grupo Aeroportuario vs. Corporacion America Airports | Grupo Aeroportuario vs. AerSale Corp | Grupo Aeroportuario vs. Flughafen Zrich AG |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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