Correlation Between Viscofan and Aena SA
Can any of the company-specific risk be diversified away by investing in both Viscofan 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 Viscofan and Aena SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viscofan and Aena SA, you can compare the effects of market volatilities on Viscofan 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 Viscofan with a short position of Aena SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viscofan and Aena SA.
Diversification Opportunities for Viscofan and Aena SA
Modest diversification
The 3 months correlation between Viscofan and Aena is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Viscofan and Aena SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SA and Viscofan 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 Viscofan 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 Viscofan i.e., Viscofan and Aena SA go up and down completely randomly.
Pair Corralation between Viscofan and Aena SA
Assuming the 90 days trading horizon Viscofan is expected to under-perform the Aena SA. But the stock apears to be less risky and, when comparing its historical volatility, Viscofan is 1.29 times less risky than Aena SA. The stock trades about -0.08 of its potential returns per unit of risk. The Aena SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 20,800 in Aena SA on December 1, 2024 and sell it today you would earn a total of 680.00 from holding Aena SA or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viscofan vs. Aena SA
Performance |
| Timeline |
| Viscofan |
| Aena SA |
Viscofan and Aena SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viscofan and Aena SA
The main advantage of trading using opposite Viscofan and Aena SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viscofan 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 Viscofan 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. Caixabank SA | Aena SA vs. Atresmedia Corporacin de | Aena SA vs. Borges Agricultural Industrial | Aena SA vs. Arteche Lantegi Elkartea |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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