Correlation Between GM and Aena SA
Can any of the company-specific risk be diversified away by investing in both GM and Aena SA 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 GM and Aena SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Aena SA, you can compare the effects of market volatilities on GM and Aena SA 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 GM with a short position of Aena SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Aena SA.
Diversification Opportunities for GM and Aena SA
Very good diversification
The 3 months correlation between GM and Aena is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Aena SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SA and GM 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 General Motors are associated (or correlated) with Aena SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SA has no effect on the direction of GM i.e., GM and Aena SA go up and down completely randomly.
Pair Corralation between GM and Aena SA
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Aena SA. In addition to that, GM is 2.12 times more volatile than Aena SA. It trades about -0.34 of its total potential returns per unit of risk. Aena SA is currently generating about 0.23 per unit of volatility. If you would invest 20,240 in Aena SA on November 27, 2024 and sell it today you would earn a total of 1,060 from holding Aena SA or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Motors vs. Aena SA
Performance |
| Timeline |
| General Motors |
| Aena SA |
GM and Aena SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Aena SA
The main advantage of trading using opposite GM and Aena SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Aena SA 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 SA will offset losses from the drop in Aena SA's long position.The idea behind General Motors and Aena SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Aena SA vs. Vytrus Biotech SA | Aena SA vs. Atresmedia Corporacin de | Aena SA vs. Biotechnology Assets SA | Aena SA vs. Borges Agricultural Industrial |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |