Correlation Between Grupo Aeroportuario and Beijing Capital
Can any of the company-specific risk be diversified away by investing in both Grupo Aeroportuario and Beijing Capital 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 Beijing Capital 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 Beijing Capital International, you can compare the effects of market volatilities on Grupo Aeroportuario and Beijing Capital 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 Beijing Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aeroportuario and Beijing Capital.
Diversification Opportunities for Grupo Aeroportuario and Beijing Capital
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grupo and Beijing is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and Beijing Capital International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Capital Inte 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 Beijing Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Capital Inte has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and Beijing Capital go up and down completely randomly.
Pair Corralation between Grupo Aeroportuario and Beijing Capital
Considering the 90-day investment horizon Grupo Aeroportuario del is expected to generate 0.55 times more return on investment than Beijing Capital. However, Grupo Aeroportuario del is 1.82 times less risky than Beijing Capital. It trades about 0.03 of its potential returns per unit of risk. Beijing Capital International is currently generating about -0.01 per unit of risk. If you would invest 14,240 in Grupo Aeroportuario del on August 25, 2024 and sell it today you would earn a total of 4,468 from holding Grupo Aeroportuario del or generate 31.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Aeroportuario del vs. Beijing Capital International
Performance |
| Timeline |
| Grupo Aeroportuario del |
| Beijing Capital Inte |
Grupo Aeroportuario and Beijing Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Aeroportuario and Beijing Capital
The main advantage of trading using opposite Grupo Aeroportuario and Beijing Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aeroportuario position performs unexpectedly, Beijing Capital 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 Beijing Capital will offset losses from the drop in Beijing Capital's long position.| Grupo Aeroportuario vs. Grupo Aeroportuario del | Grupo Aeroportuario vs. Corporacion America Airports | Grupo Aeroportuario vs. AerSale Corp | Grupo Aeroportuario vs. Flughafen Zrich AG |
| Beijing Capital vs. Grupo Aeroportuario del | Beijing Capital vs. Grupo Aeroportuario del | Beijing Capital vs. Grupo Aeroportuario del | Beijing Capital vs. AerSale Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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