Correlation Between Grupo Aeroportuario and 78409VBL7

Can any of the company-specific risk be diversified away by investing in both Grupo Aeroportuario and 78409VBL7 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 78409VBL7 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 SPGI 37 01 MAR 52, you can compare the effects of market volatilities on Grupo Aeroportuario and 78409VBL7 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 78409VBL7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aeroportuario and 78409VBL7.

Diversification Opportunities for Grupo Aeroportuario and 78409VBL7

0.47

Correlation Coefficient

Grupo Aeroportuario  78409VBL7

Very weak diversification

The 3 months correlation between Grupo and 78409VBL7 is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and SPGI 37 01 MAR 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPGI 37 01 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 78409VBL7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPGI 37 01 has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and 78409VBL7 go up and down completely randomly.

Pair Corralation between Grupo Aeroportuario and 78409VBL7

Considering the 90-day investment horizon Grupo Aeroportuario del is expected to generate 2.14 times more return on investment than 78409VBL7. However, Grupo Aeroportuario is 2.14 times more volatile than SPGI 37 01 MAR 52. It trades about 0.03 of its potential returns per unit of risk. SPGI 37 01 MAR 52 is currently generating about -0.02 per unit of risk. If you would invest  22,359  in Grupo Aeroportuario del on October 3, 2024 and sell it today you would earn a total of  3,404  from holding Grupo Aeroportuario del or generate 15.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	88.39%
Values	Daily Returns

Grupo Aeroportuario del  vs.  SPGI 37 01 MAR 52

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.

SPGI 37 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPGI 37 01 MAR 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 SPGI 37 01 MAR 52 investors.

Pair Trading with Grupo Aeroportuario and 78409VBL7

The main advantage of trading using opposite Grupo Aeroportuario and 78409VBL7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aeroportuario position performs unexpectedly, 78409VBL7 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 78409VBL7 will offset losses from the drop in 78409VBL7's long position.

The idea behind Grupo Aeroportuario del and SPGI 37 01 MAR 52 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.