Correlation Between Grupo Aeroportuario and Aurania Resources

Can any of the company-specific risk be diversified away by investing in both Grupo Aeroportuario and Aurania Resources 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 Aurania Resources 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 Aurania Resources, you can compare the effects of market volatilities on Grupo Aeroportuario and Aurania Resources 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 Aurania Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aeroportuario and Aurania Resources.

Diversification Opportunities for Grupo Aeroportuario and Aurania Resources

-0.06

Correlation Coefficient

Grupo Aeroportuario  Aurania Resources

Good diversification

The 3 months correlation between Grupo and Aurania is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and Aurania Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurania Resources 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 Aurania Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurania Resources has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and Aurania Resources go up and down completely randomly.

Pair Corralation between Grupo Aeroportuario and Aurania Resources

Considering the 90-day investment horizon Grupo Aeroportuario is expected to generate 1.64 times less return on investment than Aurania Resources. But when comparing it to its historical volatility, Grupo Aeroportuario del is 3.46 times less risky than Aurania Resources. It trades about 0.05 of its potential returns per unit of risk. Aurania Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  29.00  in Aurania Resources on December 28, 2024 and sell it today you would lose (2.00) from holding Aurania Resources or give up 6.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Grupo Aeroportuario del  vs.  Aurania Resources

Grupo Aeroportuario del

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Aeroportuario del are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Grupo Aeroportuario may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aurania Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aurania Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Aurania Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Aeroportuario and Aurania Resources

The main advantage of trading using opposite Grupo Aeroportuario and Aurania Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aeroportuario position performs unexpectedly, Aurania Resources 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 Aurania Resources will offset losses from the drop in Aurania Resources' long position.

The idea behind Grupo Aeroportuario del and Aurania Resources 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.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.