Correlation Between All Iron and Aena SA
Can any of the company-specific risk be diversified away by investing in both All Iron 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 All Iron and Aena SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between All Iron Re and Aena SA, you can compare the effects of market volatilities on All Iron 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 All Iron with a short position of Aena SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of All Iron and Aena SA.
Diversification Opportunities for All Iron and Aena SA
Very weak diversification
The 3 months correlation between All and Aena is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding All Iron Re and Aena SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SA and All Iron 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 All Iron Re 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 All Iron i.e., All Iron and Aena SA go up and down completely randomly.
Pair Corralation between All Iron and Aena SA
Assuming the 90 days trading horizon All Iron is expected to generate 1.42 times less return on investment than Aena SA. In addition to that, All Iron is 1.71 times more volatile than Aena SA. It trades about 0.09 of its total potential returns per unit of risk. Aena SA is currently generating about 0.21 per unit of volatility. If you would invest 17,730 in Aena SA on August 25, 2024 and sell it today you would earn a total of 2,310 from holding Aena SA or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.48% |
| Values | Daily Returns |
All Iron Re vs. Aena SA
Performance |
| Timeline |
| All Iron Re |
| Aena SA |
All Iron and Aena SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with All Iron and Aena SA
The main advantage of trading using opposite All Iron and Aena SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All Iron 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.| All Iron vs. Aedas Homes SL | All Iron vs. Vytrus Biotech SA | All Iron vs. Technomeca Aerospace SA | All Iron vs. Atresmedia Corporacin de |
| Aena SA vs. Borges Agricultural Industrial | Aena SA vs. NH Hoteles | Aena SA vs. All Iron Re | Aena SA vs. Hispanotels Inversiones SOCIMI |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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