Correlation Between Grupo Ezentis and Aena SA

Can any of the company-specific risk be diversified away by investing in both Grupo Ezentis and Aena SA 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 Ezentis and Aena SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grupo Ezentis SA and Aena SA, you can compare the effects of market volatilities on Grupo Ezentis and Aena SA 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 Ezentis with a short position of Aena SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Ezentis and Aena SA.

Diversification Opportunities for Grupo Ezentis and Aena SA

0.52

Correlation Coefficient

Grupo Ezentis  Aena SA

Very weak diversification

The 3 months correlation between Grupo and Aena is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Ezentis SA and Aena SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SA and Grupo Ezentis 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 Ezentis SA are associated (or correlated) with Aena SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SA has no effect on the direction of Grupo Ezentis i.e., Grupo Ezentis and Aena SA go up and down completely randomly.

Pair Corralation between Grupo Ezentis and Aena SA

Assuming the 90 days trading horizon Grupo Ezentis SA is expected to generate 4.04 times more return on investment than Aena SA. However, Grupo Ezentis is 4.04 times more volatile than Aena SA. It trades about 0.13 of its potential returns per unit of risk. Aena SA is currently generating about 0.15 per unit of risk. If you would invest  8.80  in Grupo Ezentis SA on December 29, 2024 and sell it today you would earn a total of  3.20  from holding Grupo Ezentis SA or generate 36.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Grupo Ezentis SA  vs.  Aena SA

Grupo Ezentis SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Ezentis SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Grupo Ezentis exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aena SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aena SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Aena SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Grupo Ezentis and Aena SA

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

The idea behind Grupo Ezentis SA and Aena SA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.