Correlation Between Volato and Grupo Aeroportuario

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

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

Diversification Opportunities for Volato and Grupo Aeroportuario

-0.34

Correlation Coefficient

Volato  Grupo Aeroportuario

Very good diversification

The 3 months correlation between Volato and Grupo is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Volato Group and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del and Volato 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 Volato Group are associated (or correlated) with Grupo Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of Volato i.e., Volato and Grupo Aeroportuario go up and down completely randomly.

Pair Corralation between Volato and Grupo Aeroportuario

Given the investment horizon of 90 days Volato Group is expected to under-perform the Grupo Aeroportuario. In addition to that, Volato is 5.36 times more volatile than Grupo Aeroportuario del. It trades about -0.11 of its total potential returns per unit of risk. Grupo Aeroportuario del is currently generating about 0.07 per unit of volatility. If you would invest  17,534  in Grupo Aeroportuario del on December 28, 2024 and sell it today you would earn a total of  1,399  from holding Grupo Aeroportuario del or generate 7.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Volato Group  vs.  Grupo Aeroportuario del

Volato Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Volato Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Grupo Aeroportuario del

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Aeroportuario del are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Grupo Aeroportuario may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Volato and Grupo Aeroportuario

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

The idea behind Volato Group and Grupo Aeroportuario del 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.