Correlation Between Grupo Aeroportuario and Net Lease

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

Diversification Opportunities for Grupo Aeroportuario and Net Lease

-0.3

Correlation Coefficient

Grupo Aeroportuario  Net Lease

Very good diversification

The 3 months correlation between Grupo and Net is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and Net Lease Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Net Lease Office 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 Net Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Net Lease Office has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and Net Lease go up and down completely randomly.

Pair Corralation between Grupo Aeroportuario and Net Lease

Considering the 90-day investment horizon Grupo Aeroportuario del is expected to generate 1.24 times more return on investment than Net Lease. However, Grupo Aeroportuario is 1.24 times more volatile than Net Lease Office. It trades about -0.04 of its potential returns per unit of risk. Net Lease Office is currently generating about -0.29 per unit of risk. If you would invest  26,596  in Grupo Aeroportuario del on October 11, 2024 and sell it today you would lose (531.00) from holding Grupo Aeroportuario del or give up 2.0% of portfolio value over 90 days.

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

Grupo Aeroportuario del  vs.  Net Lease Office

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 unsteady 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.

Net Lease Office

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Net Lease Office 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.

Pair Trading with Grupo Aeroportuario and Net Lease

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

The idea behind Grupo Aeroportuario del and Net Lease Office 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.