Correlation Between Grifols SA and Aena SA
Can any of the company-specific risk be diversified away by investing in both Grifols SA 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 Grifols SA and Aena SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grifols SA and Aena SA, you can compare the effects of market volatilities on Grifols SA 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 Grifols SA with a short position of Aena SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grifols SA and Aena SA.
Diversification Opportunities for Grifols SA and Aena SA
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grifols and Aena is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Grifols SA and Aena SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SA and Grifols SA 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 Grifols SA 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 Grifols SA i.e., Grifols SA and Aena SA go up and down completely randomly.
Pair Corralation between Grifols SA and Aena SA
Assuming the 90 days trading horizon Grifols SA is expected to under-perform the Aena SA. In addition to that, Grifols SA is 3.26 times more volatile than Aena SA. It trades about -0.03 of its total potential returns per unit of risk. Aena SA is currently generating about -0.08 per unit of volatility. If you would invest 20,600 in Aena SA on August 30, 2024 and sell it today you would lose (360.00) from holding Aena SA or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grifols SA vs. Aena SA
Performance |
| Timeline |
| Grifols SA |
| Aena SA |
Grifols SA and Aena SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grifols SA and Aena SA
The main advantage of trading using opposite Grifols SA and Aena SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grifols SA 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.| Grifols SA vs. ACS Actividades de | Grifols SA vs. Acerinox | Grifols SA vs. Ferrovial | Grifols SA vs. International Consolidated Airlines |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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