Correlation Between Grupo Aeroportuario and Grupo Financiero

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

Diversification Opportunities for Grupo Aeroportuario and Grupo Financiero

-0.05

Correlation Coefficient

Grupo Aeroportuario  Grupo Financiero

Good diversification

The 3 months correlation between Grupo and Grupo is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and Grupo Financiero Inbursa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Financiero Inbursa 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 Grupo Financiero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Financiero Inbursa has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and Grupo Financiero go up and down completely randomly.

Pair Corralation between Grupo Aeroportuario and Grupo Financiero

Assuming the 90 days trading horizon Grupo Aeroportuario del is expected to generate 0.8 times more return on investment than Grupo Financiero. However, Grupo Aeroportuario del is 1.25 times less risky than Grupo Financiero. It trades about -0.01 of its potential returns per unit of risk. Grupo Financiero Inbursa is currently generating about -0.04 per unit of risk. If you would invest  53,281  in Grupo Aeroportuario del on September 24, 2024 and sell it today you would lose (531.00) from holding Grupo Aeroportuario del or give up 1.0% 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.  Grupo Financiero Inbursa

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. In spite of latest unfluctuating performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Grupo Financiero Inbursa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Financiero Inbursa has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Grupo Financiero is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Grupo Aeroportuario and Grupo Financiero

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

The idea behind Grupo Aeroportuario del and Grupo Financiero Inbursa 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.