Correlation Between Grupo Aeroportuario and Dine Brands

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

Diversification Opportunities for Grupo Aeroportuario and Dine Brands

-0.59

Correlation Coefficient

Grupo Aeroportuario  Dine Brands

Excellent diversification

The 3 months correlation between Grupo and Dine is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global 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 Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and Dine Brands go up and down completely randomly.

Pair Corralation between Grupo Aeroportuario and Dine Brands

Considering the 90-day investment horizon Grupo Aeroportuario del is expected to generate 0.95 times more return on investment than Dine Brands. However, Grupo Aeroportuario del is 1.05 times less risky than Dine Brands. It trades about 0.03 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.05 per unit of risk. If you would invest  22,340  in Grupo Aeroportuario del on September 19, 2024 and sell it today you would earn a total of  5,289  from holding Grupo Aeroportuario del or generate 23.68% return on investment over 90 days.

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

Grupo Aeroportuario del  vs.  Dine Brands Global

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 relatively invariable basic indicators, Grupo Aeroportuario is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Dine Brands Global

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Dine Brands Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Dine Brands is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Grupo Aeroportuario and Dine Brands

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

The idea behind Grupo Aeroportuario del and Dine Brands Global 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.

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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.