Correlation Between Grupo Aeroportuario and IENOVA

Can any of the company-specific risk be diversified away by investing in both Grupo Aeroportuario and IENOVA 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 IENOVA 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 IENOVA 475 15 JAN 51, you can compare the effects of market volatilities on Grupo Aeroportuario and IENOVA 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 IENOVA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aeroportuario and IENOVA.

Diversification Opportunities for Grupo Aeroportuario and IENOVA

-0.12

Correlation Coefficient

Grupo Aeroportuario  IENOVA

Good diversification

The 3 months correlation between Grupo and IENOVA is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and IENOVA 475 15 JAN 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IENOVA 475 15 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 IENOVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IENOVA 475 15 has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and IENOVA go up and down completely randomly.

Pair Corralation between Grupo Aeroportuario and IENOVA

Considering the 90-day investment horizon Grupo Aeroportuario del is expected to generate 0.58 times more return on investment than IENOVA. However, Grupo Aeroportuario del is 1.72 times less risky than IENOVA. It trades about -0.04 of its potential returns per unit of risk. IENOVA 475 15 JAN 51 is currently generating about -0.49 per unit of risk. If you would invest  29,093  in Grupo Aeroportuario del on September 19, 2024 and sell it today you would lose (1,464) from holding Grupo Aeroportuario del or give up 5.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	12.5%
Values	Daily Returns

Grupo Aeroportuario del  vs.  IENOVA 475 15 JAN 51

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.

IENOVA 475 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IENOVA 475 15 JAN 51 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for IENOVA 475 15 JAN 51 investors.

Pair Trading with Grupo Aeroportuario and IENOVA

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

The idea behind Grupo Aeroportuario del and IENOVA 475 15 JAN 51 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.