Correlation Between Airports and Grupo Aeroportuario
Can any of the company-specific risk be diversified away by investing in both Airports 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 Airports and Grupo Aeroportuario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airports of Thailand and Grupo Aeroportuario del, you can compare the effects of market volatilities on Airports 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 Airports with a short position of Grupo Aeroportuario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Grupo Aeroportuario.
Diversification Opportunities for Airports and Grupo Aeroportuario
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Airports and Grupo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand 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 Airports 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 Airports of Thailand 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 Airports i.e., Airports and Grupo Aeroportuario go up and down completely randomly.
Pair Corralation between Airports and Grupo Aeroportuario
Assuming the 90 days trading horizon Airports is expected to generate 3.25 times less return on investment than Grupo Aeroportuario. But when comparing it to its historical volatility, Airports of Thailand is 1.5 times less risky than Grupo Aeroportuario. It trades about 0.05 of its potential returns per unit of risk. Grupo Aeroportuario del is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 97.00 in Grupo Aeroportuario del on September 12, 2024 and sell it today you would earn a total of 1,693 from holding Grupo Aeroportuario del or generate 1745.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Grupo Aeroportuario del
Performance |
| Timeline |
| Airports of Thailand |
| Grupo Aeroportuario del |
Airports and Grupo Aeroportuario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Grupo Aeroportuario
The main advantage of trading using opposite Airports and Grupo Aeroportuario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports 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.| Airports vs. Airports of Thailand | Airports vs. Auckland International Airport | Airports vs. Aena SME SA | Airports vs. Ryanair Holdings plc |
| Grupo Aeroportuario vs. Aena SME SA | Grupo Aeroportuario vs. Superior Plus Corp | Grupo Aeroportuario vs. SIVERS SEMICONDUCTORS AB | Grupo Aeroportuario vs. Norsk Hydro ASA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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