Correlation Between Grupo Aeroportuario and CTS

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

Diversification Opportunities for Grupo Aeroportuario and CTS

-0.7

Correlation Coefficient

Grupo Aeroportuario  CTS

Excellent diversification

The 3 months correlation between Grupo and CTS is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation 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 CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and CTS go up and down completely randomly.

Pair Corralation between Grupo Aeroportuario and CTS

Considering the 90-day investment horizon Grupo Aeroportuario del is expected to under-perform the CTS. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Aeroportuario del is 1.32 times less risky than CTS. The stock trades about -0.06 of its potential returns per unit of risk. The CTS Corporation is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,897  in CTS Corporation on September 29, 2024 and sell it today you would earn a total of  415.00  from holding CTS Corporation or generate 8.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Grupo Aeroportuario del  vs.  CTS Corp.

Grupo Aeroportuario del

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Aeroportuario del has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

CTS Corporation

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CTS Corporation are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CTS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Grupo Aeroportuario and CTS

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

The idea behind Grupo Aeroportuario del and CTS Corporation 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.