Correlation Between Grupo Aeroportuario and NEWMONT

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

Diversification Opportunities for Grupo Aeroportuario and NEWMONT

0.25

Correlation Coefficient

Grupo Aeroportuario  NEWMONT

Modest diversification

The 3 months correlation between Grupo and NEWMONT is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and NEWMONT MNG P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWMONT MNG P 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 NEWMONT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWMONT MNG P has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and NEWMONT go up and down completely randomly.

Pair Corralation between Grupo Aeroportuario and NEWMONT

Considering the 90-day investment horizon Grupo Aeroportuario del is expected to generate 2.1 times more return on investment than NEWMONT. However, Grupo Aeroportuario is 2.1 times more volatile than NEWMONT MNG P. It trades about 0.01 of its potential returns per unit of risk. NEWMONT MNG P is currently generating about -0.26 per unit of risk. If you would invest  25,923  in Grupo Aeroportuario del on October 4, 2024 and sell it today you would earn a total of  27.00  from holding Grupo Aeroportuario del or generate 0.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	76.19%
Values	Daily Returns

Grupo Aeroportuario del  vs.  NEWMONT MNG P

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.

NEWMONT MNG P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NEWMONT MNG P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NEWMONT MNG P investors.

Pair Trading with Grupo Aeroportuario and NEWMONT

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

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