Correlation Between Grupo Aeroportuario and Organizacin Cultiba

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

Diversification Opportunities for Grupo Aeroportuario and Organizacin Cultiba

-0.33

Correlation Coefficient

Grupo Aeroportuario  Organizacin Cultiba

Very good diversification

The 3 months correlation between Grupo and Organizacin is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and Organizacin Cultiba SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Organizacin Cultiba SAB 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 Organizacin Cultiba. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Organizacin Cultiba SAB has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and Organizacin Cultiba go up and down completely randomly.

Pair Corralation between Grupo Aeroportuario and Organizacin Cultiba

Assuming the 90 days trading horizon Grupo Aeroportuario del is expected to generate 1.2 times more return on investment than Organizacin Cultiba. However, Grupo Aeroportuario is 1.2 times more volatile than Organizacin Cultiba SAB. It trades about 0.1 of its potential returns per unit of risk. Organizacin Cultiba SAB is currently generating about -0.03 per unit of risk. If you would invest  34,298  in Grupo Aeroportuario del on September 17, 2024 and sell it today you would earn a total of  3,594  from holding Grupo Aeroportuario del or generate 10.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Grupo Aeroportuario del  vs.  Organizacin Cultiba SAB

Grupo Aeroportuario del

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Aeroportuario del are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Grupo Aeroportuario may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Organizacin Cultiba SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Organizacin Cultiba SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Organizacin Cultiba is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grupo Aeroportuario and Organizacin Cultiba

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

The idea behind Grupo Aeroportuario del and Organizacin Cultiba SAB 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.