Correlation Between Grupo Aeroportuario and PSQ Holdings

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

Diversification Opportunities for Grupo Aeroportuario and PSQ Holdings

-0.16

Correlation Coefficient

Grupo Aeroportuario  PSQ Holdings

Good diversification

The 3 months correlation between Grupo and PSQ is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and PSQ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSQ Holdings 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 PSQ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSQ Holdings has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and PSQ Holdings go up and down completely randomly.

Pair Corralation between Grupo Aeroportuario and PSQ Holdings

Considering the 90-day investment horizon Grupo Aeroportuario del is expected to generate 0.23 times more return on investment than PSQ Holdings. However, Grupo Aeroportuario del is 4.3 times less risky than PSQ Holdings. It trades about -0.19 of its potential returns per unit of risk. PSQ Holdings is currently generating about -0.05 per unit of risk. If you would invest  27,259  in Grupo Aeroportuario del on October 14, 2024 and sell it today you would lose (1,412) from holding Grupo Aeroportuario del or give up 5.18% 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.  PSQ Holdings

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.

PSQ Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PSQ Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, PSQ Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Aeroportuario and PSQ Holdings

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

The idea behind Grupo Aeroportuario del and PSQ Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.